Annual Report 2011

Annual report 2011

Annual and Extraordinary Shareholders’ Meeting, April 17, 2012

COLA_1203062_GB_FINANCIER_couv_Prol.indd couv1 23/03/12 16:45 1 REPORT OF THE BOARD OF DIRECTORS 63 CONSOLIDATED FINANCIAL STATEMENTS OF THE COLAS GROUP 104 REPORT OF THE STATUTORY AUDITORS ON THE CONSOLIDATED FINANCIAL STATEMENTS 105 COLAS FINANCIAL STATEMENTS 119 REPORT OF THE STATUTORY AUDITORS ON COLAS FINANCIAL STATEMENTS 125 RESOLUTIONS

BOARD OF DIRECTORS as of April 17, 2012 (1)

Hervé Le Bouc Chairman and Chief Executive O! cer

Christian Balmes Director

François Bertière Director

Olivier Bouygues Director

Louis Gabanna Director

Thierry Genestar Director

Jean-François Guillemin Director

Jacques Leost Director

Colette Lewiner Director AUDITORS

Philippe Marien Permanent Representative KPMG SA of Bouygues SA Statutory Auditor

Thierry Montouché Mazars Director Statutory Auditor

Jean-Claude Tostivin François Caubrière Director Substitute

Gilles Zancanaro Thierry Colin Director Substitute

(1) If approved by the Annual General Shareholders’ Meeting on April 17, 2012.

Colas Group Report of the Board of Directors to the Combined Annual and Extraordinary Shareholders’ Meeting, April 17, 2012

Dear Shareholders, We have convened this Combined Annual and Extraordinary Shareholders’ Meeting to deal with the following matters of business in compliance with French law and our Company by-laws: • in the “Ordinary Business” section, we present a report on our management of the Group during the past year, together with its current position and trends, submit the 2011 ﬁ nancial statements, the proposed appropriation of earnings, and the agreements and operations pursuant to articles L. 225-38 et seq. of the French Code of Commerce for your approval, invite you to reappoint four Directors, and renew the authorization granted to the Board to allow the Company to buy back its shares; • in the “Extraordinary Business” section, we invite you to renew your authorizations granting powers to the Board of Directors for the purposes of: −reducing the Company’s share capital by canceling treasury shares, −issuing securities conferring entitlement to debt instruments other than the bonds provided for in article L. 228-40 of the French Code of Commerce.

ORDINARY PORTION OF THE COMBINED SHAREHOLDER'S MEETING

2011

In 2011, against a global backdrop that has never- Noteworthy disparities exist in revenue trends theless remained dominated by the economic and throughout the geographic zones where the Group fi nancial crisis, Colas was able to post solid busi- operates. Business in mainland France, North ness fi gures, with revenue at the end of December America and Asia/Australia enjoyed growth and 2011 totaling 12.4 billion euros, up 6.4% over 2010 northern Europe is up slightly (excluding sales of (+5.1% with unchanged exchanged rates and scope refi ned products). Africa, the Indian Ocean and of business). The Group share of net profi t increased North Africa have dropped o! somewhat, along a steep 50% at 336 million euros, compared to the with the French overseas departments. Central end of December 2010 (224 million euros). Current Europe has slumped sharply, as expected. operating income is up 28% at 466 million euros (365 million euros at the end of December 2010), Compared to last year, the breakdown of revenue thanks to a strong-willed strategy that has focused remains unchanged. Sales in France, including the on profi t margin over volume, to streamlining and French overseas departments, account for 58% of improvement actions in central Europe in particular total revenue at 7.2 billion euros. Outside of France, as well as throughout the Group’s network, and to including French overseas territories, revenue ongoing targeted acquisitions. As there were no amounted to 5.2 billion euros, i.e., 42% of total reve- non-current expenses in 2011, operating income nue. When combined, Europe (including France) was up 49% at 466 million euros against 313 million with 9.1 billion euros, and North America with 2.4 bil- euros at the end of December 2010. Favorable lion euros account for 11.5 billion euros, i.e., 92% of weather in mainland France also boosted the total revenue. Group’s business fi gures in 2011.

Colas Group 1 The Group kept tight control over investments. reserved-lane public transport, industrial and com- After deduction of asset sales, the net total of mercial facilities, roads and main networks for real- investments was 496 million euros, only slightly estate projects including individual homes and under the 500 million euros invested in 2010. apartments buildings, urban development projects External growth investments (shares and assets) (pedestrian zones, city squares), recreational ameni- amounted to 100 million euros (63 million in 2010). ties (sports facilities, automobile circuits, bike paths) Net investments in tangible and intangible assets and environmental protection (retention ponds, mostly involving the renewal of plant and equip- landscaping, windpower parks). This activity ment, totaled 401 million euros, compared to includes small-scale civil engineering and drainage 437 million euros in 2010. work often linked to road construction and mainte- Free cash fl ow (cash fl ow from operations less net nance projects. The business is also backed by an fi nancial debt, taxes and net investments) totaled upstream network that produces aggregates and 327 million euros (225 million in 2010). materials mainly designed for road works (asphalt mixes, binders, emulsions, ready-mix concrete), The Group continued to focus on controlling cash products that are used by the Group or sold to third fl ow. Despite even shorter supplier payment dead- parties. lines in France that have led to an increase in working capital requirements, the net cash position at In mainland France, Colas operates in the Roads the end of December 2011 amounted to 28 million sector via a network of 16 regional subsidiaries euros, compared to consolidated net debt of located throughout the country. 57 million euros at the end of December 2010, i.e., an improvement of 85 million euros during the fi s- SPECIALIZED ACTIVITIES cal year. (28% of total revenue in Mainland France) As of December 31, 2011, Colas’ fi nancial situation is • The Building sector comprises conventional con- solid, with a Group share of shareholders’ equity struction business located exclusively in the Greater prior to dividend distribution of 2,494 million euros, Paris Area, along with demolition and deconstruc- compared to 2,345 million euros at the end of 2010, tion of old buildings both in and around Paris and and an 84% coverage ratio of non-current assets by throughout the country, often coupled with material shareholders’ equity and non-current provisions, recycling activities. identical to that of the end of 2010. • The Road Safety and Signaling sector includes the manufacture, installation and maintenance of safety equipment (guardrails, tra$ c directing systems), road marking (production of road paints Business and application of road markings), signs, lights and tra$ c/access management systems (tra$ c lights, equipment for toll booths, parking lots, access con- France trol). Aximum and its subsidiaries operate in these markets. Revenue in France (mainland France plus overseas The Pipes and mains sector encompasses the departments) amounted to 7.2 billion euros against • installation and maintenance of large and small 6.7 billion euros in 2010, i.e., a 8.0% increase. diameter pipes for the transport of fl uids (oil, natural gas, water), including the construction of compres- sor stations, along with dry networks (electricity, Mainland France heating, telecommunications), small-scale civil engineering projects and industrial services. Spac and its Revenue in mainland France amounted to 6.8 billion subsidiaries operate in these markets. euros, up 8.7% over 2010 (7.1% with an unchanged scope of business). • The Waterproofi ng sector includes: – the production and sales of waterproofi ng mem- The Group’s activities include: branes including photovoltaic membranes in France ROADS and elsewhere around the world, skydomes and (72% of total revenue in mainland France) fume/smoke removal systems, installation and maintenance of servocontrols; This highly-diverse Roads sector includes a variety – the waterproofi ng of roadways and sidewalks of projects – both big and small – backed by a full (mastic asphalt) and buildings, cladding and roof- range of businesses, expertise and know-how. It ing (o$ ces, industrial sites, auditoriums, museums) covers some 60,000 projects each year involving including complex work on highly architectural the construction and maintenance of transport projects: aluminum and steel cladding and roofi ng, infrastructure: highways, national roads, city streets, metal frameworks, photovoltaic roofi ng. airports, seaports, platforms for railways and Smac and its subsidiaries operate in these markets.

2 Colas Group Report of the Board of Directors • The Railway sector comprises the design and Roads engineering of complex, large-scale projects, the In 2011, despite major disparities in investments by construction, renewal and maintenance of railway local authorities (urban areas vs rural zones, small track (conventional and high-speed lines, tram- towns vs big cities), the road market was relatively ways, subways), for both fi xed installation and stable in volume compared to 2010, boosted by infrastructure with the laying and maintenance of works involving a great number of reserved-lane track, electrifi cation (substations, catenary sys- public transport projects. The Group’s 16 regional tems), signaling and safety systems, special work road construction subsidiaries recorded road sales (bridge cranes, sidings, tunnels), the manufacture of 4.9 billion euros, up 9% against 2010 (of which of cross ties, as well as a railway freight business nearly 5% is due to rising construction costs, in par- (notably transport of aggregates for Group com- ticular energy, bitumen and other raw materials). panies as well as goods for private customers). Excellent weather conditions helped further Colas Rail and its subsidiaries operate in these mar- enhance business fi gures all year long. Several kets. major projects were won (concession for Highway • Production and sales of oil refi nery products A 63 in southwest France, PPP for Vichy bypass, The Société de la Ra$ nerie de Dunkerque (SRD), PPP for roads and street lights in Le Plessis-Robin- acquired in 2010, manufactures a range of oil-based son). Prices pushed down by tough competition products for Colas (60%) and Total (40%) as part seem to have bottomed out in 2011. The Group’s of a processing contract that runs up to the end of companies and profi t centers continued to adapt, 2012. The products, including bitumen, oils, waxes, to rationalize and to streamline in order to improve parrafi n and special fuels, are sold by SRD to Colas competitiveness and to make for a better fi t with and Total, who then in turn sell them. A specialized current local and regional market conditions. The bitumen division is in charge of selling the bitumen market for Group’s techniques, products and pro- manufactured by SRD (processing contract) to cesses designed to enhance responsible develop- the Group’s road subsidiaries. It also sells other ment has made headway from 7% in 2010 to 9% in products (oils, parrafi n, special fuels) to third-party 2011 for reclaimed asphalt pavement (RAP), whereas customers. warm mixes have remained stable at 4%. The production of aggregates is unchanged against 2010.

The Group’s competitors in the road construction industry and in other public works sectors remain Specialized activities Eurovia (Vinci group), Ei! age TP (Ei! age group), The Group’s specialized activity, most of which is NGE group, major regional companies such as performed by dedicated subsidiaries, recorded rev- Ramery, Charrier, and Pigeon, in addition to a very enue of 1.9 billion euros in 2011, up 8%. This increase tight network of roughly 1,600 small and medium- is mainly due to the full year consolidation of sized local companies. On the aggregate and refi ned products sales, against only six months in ready-mix concrete markets, competition comes 2010. Excluding the sales of refi ned products, the from cement manufacturing groups such as increase is 5%. Lafarge, Cemex and Ciments Français, along with a network of regional and local aggregate producers, ROAD SAFETY AND SIGNALING some of whom operate in the public works sector as well. The Group’s specialized road-related busi- Aximum and its subsidiairies recorded a 7% nesses contend with other specialized subsidiaries increase in revenue over 2010, boosted by the full of the French construction groups mentioned fi scal year consolidation of acquisition of Sagem- above, along with major international companies as com’s lights and signaling business acquired the well. There are also a number of small, medium and previous fi scal year. The market experienced a large specialized business units that operate on slight drop in volume and a rise in raw material regional, national and international markets, such prices (notably those used to manufacture road as: markings). A ten-year high energy performance – signing and signaling: Signature (Burelle and contract covering street lights and tra$ c lights in Eurovia groups), Girod, Lacroix; the City of Paris was signed by Evesa, a consortium – railways: ETF (Eurovia), TSO (NGE), Alstom (TGS), in which Aximum holds a 15% stake. The agree- Ei! age Rail and a number of independent medium- ment, which covers assistance in contracting, oper- sized companies. ating and maintenance of 180,000 street lights and 1,700 intersections, comprises a commitment Colas is ranked fi rst in the road and railway sectors, to ensure energy savings of 30% over ten years. second in the waterproofi ng market, and third in the production of aggregates. Ranking has no signifi cance in the other lines of business.

Report of the Board of Directors Colas Group 3 Streamling in Aximum’s business involving the Construction and maintenance of highway net- design, manufacture and sales of electronic prod- works: A 11: refurbishment of a 35-km section ucts has made headway. A consortium was formed between Thivars and Brou, using reclaimed asphalt by an investment fund (65%) and Aximum (35%) to pavement; A 23: preventive maintenance between acquire sign manufacturing plant and equipment Sars-et-Rosières and Saint-Amand-les-Eaux, using belonging to the former company SES currently in reclaimed asphalt pavement; A 29: lowering a liquidation. 1.2 km section in the Somme department to allow for the passage of the future Seine-Nord Europe PIPELINES canal and building a temporary section of highway; A 36: refurbishment of roadway between Fontaine Spac and its subsidiaries: in 2011, sales were down and Burnhaupt, using reclaimed asphalt pavement 5%, due to a slump in the traditional pipeline busi- recycled in situ; A 46: refurbishment of roadway in ness in mainland France. In Belgium, an 85-km long Saint-Priest; A 48: widening and reinforcement of pipeline project with di$ cult contractual and fi nan- roadway on the Voreppe – Saint-Égrève section cial conditions was completed. The subsidiary con- with 30% reclaimed asphalt pavement; A 71: refur- tinued to broaden its widespread range of skills bishment of roadway in Bourges. and expertise and complex projects are currently underway involving compression plants and gas Construction, maintenance and renovation of road storage units, such as the one in Hauterives. networks: construction of bypasses in Montluçon, Fleuré, Chanos-Curson using low temperature mix with 30% reclaimed asphalt pavement; refurbish- WATERPROOFING ment of pavement on Route RN 191 linking High- Despite a sluggish market during the last quarter ways A 10 and A 11; refurbishment of a section of and a sharp drop in the photovoltaic sector, Smac Route RD 338 on the Les Hunaudières straight line, and its subsidiaries recorded an increase in revenue part of the 24 Hours of Le Mans race, using warm fi gures of 13%, thanks to a more buoyant construc- mix and skid-resistant surfacing with Colfl ex® tion market during the fi rst half-year and particularly binder; refurbishment of bypasses near La Rochelle, favorable weather especially at the beginning of the on Route RD 28 between Soultz-sous-Forêts and year. Industrial business (waterproofi ng membranes Seltz, on Route RD 928 in La Loupe using 50% RAP, and resins) also had a satisfactory year, with grow- on Route RD 763 in Belleville-sur-Vie using 30% ing export sales, in spite of the negative impact of RAP, on Route RD 934 between Chailly-en-Brie and rising raw material prices. Thanks to its strong, resil- La Ferté-Gaucher with 20% to 30% RAP; mainte- ient business network, Smac performed well. nance of road networks in the Landes regions using warm mix and in the Charentes region; maintenance RAILWAYS of city streets in Longué-Jumelles using Com- pomac®, an environmentally-friendly cold technique. With revenue for 2011 up by 6% compared to 2010, business at Colas Rail remained buoyant in a Airports – ports: reinforcement of aprons using ker- dynamic, albeit very competitive, market, boosted osene-resistant mixes at the Ajaccio airport; build- by the construction of new tramway lines in Tours, ing of a dock at the Port of Saint-Martin-de-Ré. Dijon, Besançon and Paris, along with renovation Urban development projects: redesigning the and maintenance of track with high output track eastern access route into Lyon by transforming a renewal units and closed-line contracts. The freight section of highway into a city boulevard; redesign- business continues to expand with the signature of ing the northern access route into Marseille and the a contract with a major French carmaker for auto main access route to Saint-Brieuc using in-place transport by rail. pavement retreatment, warm mixes, noise-reducing mixes, visually-appealing mixes; surfacing in a tun- Sales of refi ned oil products nel in Toulon; work on the access roads to the future Stadium of Lille, using 3E®+R warm mix with Sales of refi ned products recorded a full-year rev- RAP, Nanosoft® noise-reducing mix and Rugosoft® enue of 0.2 billion euros, against 0.14 billion euros in skid-resistant mix, including a total of 25,000 man- 2010 (only 6 months). hours for underpriviledged people trying to enter the job market; redesigning of downtown areas In all, 2011 was witness to nearly 84,000 projects in in the towns of Seclin and Château-Thierry using mainland France. Here are some noteworthy exam- Microville® HP noise-reducing mix, and at the Leclerc ples to demonstrate the broadly diverse nature of square in Poitiers. the Group’s businesses in France.

4 Colas Group Report of the Board of Directors Public transport: construction of the Tours tram- Railways: turnkey upgrading on closed lines for ways including employees on job-access programs, two rail lines: Siorac-Sarlat (25 km of track voies) construction of the East line for the Dijon tramway, and Bergerac-Sauveboeuf (23 km of track) in Dor- continued work on tramways T1, T2, T3, T5, T6 in dogne; installation of 7.1 km of track on the Dijon and around Paris, including the hiring of employees tramway and 9 km of track on the T2 tramway in on job-access programs, using warm mix with RAP. Lyon. Logistics platforms, other facilities: construction Building, deconstruction/demolition: construction of an industrial zone in Neuves-Maisons; roads, net- and rehabilitation of Marcel-Sembat high school in works and parking lots for a commercial facility in Sotteville; demolition using “verinage” of a 140-meter Claira; construction of facilities and roads for a long low-income housing complex comprising shopping center in La Chapelle-Saint-Luc, includ- 315 apartments in Asnières-sur-Seine. ing retention ponds. Athletic and recreational facilities: construction of Concessions and PPPs a 17-km bike path along the banks of the Somme between Cappy and Amiens, using mix with trans- COFIROUTE: HIGHWAY CONCESSION lucent Vegeclair® binder; construction of a porous COMPANY FOR NORTHWEST FRANCE asphalt track at the Chantilly horse racetrack; refurbishment of a track at the Vincennes horse race- Cofiroute, a highway concession company in which track. Colas holds a 16.67% stake, operates a 1,100-km interurban network in northwestern France and the Environment: earthworks, waterproofi ng, roads A86 Duplex tunnel near Paris. In 2011, the network and networks for an extension at the Grenay land- recorded a 0.8% increase in traffic, with passenger fi ll; construction of the Ecostep® water treatment vehicle traffic on the rise at +1.0% and HGV traffic plant that uses reed plant fi lters in Saint-Jean-de- down slightly by 0.4% compared to 2010. Improve- Marcel; roads, networks and landscaping at a pho- ments continued on the interurban network, with tovoltaic plant in Crucey-Villages for EDF; refection investments in the framework of the “Green High- and creation of a pipe network at the Salins-les- way Package” (treatment of waste water, noise- Bains spa. reducing mixes, noise barriers, improved parking Safety and signaling: renovation and upgrading of areas and design of eco-friendly areas to help pre- toll booth equipment at Veauchette on Highway serve biodiversity). A 72; installation of noise barriers on Highway A 31; driving of 30,000 steel piles for 2,500 steel frames ADELAC: CONCESSION FOR HIGHWAY A 41 and 300,000 photovoltaic panels at the Toul solar NORTH center. Adelac, a concession company in which Colas holds Pipes, mains: construction of the Hauterives and a 6.9% share for a duration of fifty-five years, oper- Beynes natural gas storage units with an EPCC ates a 19.7-km stretch of Highway A 41 between contract (Engineering, Procurement, Construction Saint-Julien-en-Genevois and Villy-le-Peloux on the and Commissioning); rehabilitation of urban heat- Annecy, France, to Geneva, Switzerland, link. Despite ing network between the Porte de Vincennes and a 14% increase in traffic compared to 2010 during the Porte de Bagnolet in Paris as part of the T3 its third year of operation, average traffic – at tramway project; construction of rear track for a 21,000 vehicles per day – is still under the initial gantry crane used to load/unload containers in the forecasts, due mainly to lower-than-expected HGV Grand Port of Marseille in Fos. traffic and to the impact of the economic crisis. Waterproofi ng: refurbishment at night of platforms ATLANDES: CONCESSION FOR HIGHWAY A 63 in the Paris metro on lines 1 and 13 using low tem- IN SOUTHWEST FRANCE perature mastic asphalt and special measures to protect employees and the environment (materials Atlandes, a concession company in which Colas transported by remote controlled machines, no holds a 15.57%, is in charge of fi nancing, designing, smoke or fumes); cladding, roofi ng at Georges- widening from 4 to 6 lanes, operating and main- Frêche high school in Montpellier, with installation taining a 105-km section of Highway A 63 between of 4,000 triangular Alucobond cases; supplying Salles and Saint-Geours-de-Maremne for a dura- 90,000 m 2 of Coletanche® for a mining project in tion of fourty years. The concession was granted Toro Mucho, Chili. on January 23, 2011 and the transfer of existing

Report of the Board of Directors Colas Group 5 State-owned infrastructure and State-employed manpower was e! ective on May 23, 2011. As stipu- French overseas lated in the concession contract, Atlandes paid out departments a 400-million euro entrance fee that corresponds Revenue posted for the French overseas depart- to the taking on of existing infrastructure. The work, ments amounted to 419 million euros, down 3% which should amount to some 500 million euros, from 2010. was awarded to a building consortium comprising Colas Sud-Ouest (the project manager) and Screg On Reunion Island, revenue was stable after two Sud-Ouest, two companies which hold a combined consecutive years of drops. Business for the build- 51% share. At the end of September, the work got ing sector enjoyed a slight upturn at the end of the o! to a start, once the proper permits had been year, boosted by private investment, low-income secured. Tolls will begin to be collected in June housing construction programs and renovation 2013, after the initial construction and upgrading projects on public buildings (schools, etc.). The phase has ensured compliance with current stand- Road sector is still waiting for the launching of ards for highways and environmental protection. major projects. The materials business (aggregates, The entire section is slated for completion in June concrete block, beams) has steadied. Among the 2014. highlights of 2011, one can cite the construction of the new Saint-Benoît hospital and the Saint-André MARS: CONCESSION FOR THE REIMS water treatment plant. TRAMWAY AND BUS NETWORK In Mayotte, business was rocked by strikes that The Mars concession company, in which Colas holds paralyzed the island in October and November. The an 8.5% stake, completed the design, construction design-build Majicavo prison extension and reha- and ﬁ nancing of the tramway for the City of Reims, bilitation project got o! to a start and the con- France. As part of the concession, the company also struction of the Dzoumogné waste storage site is ensures the operation and management of the well underway. Warm mixes are now being used on entire public transport system in greater Reims for a the majority of surfacing projects. duration of thirty years. Mars has been operating the In the Caribbean (Martinique and Guadeloupe), the city’s bus network (roughly 160 buses) since 2008 market has remained ﬂ at, although there was a and the tram network (11.2 km) since it was opened slight increase in public investment for road main- to the public in April 2011. tenance in Martinique and a second half-year launch of a number of roads and main networks EVESA: HIGH ENERGY PERFORMANCE projects in the framework of housing programs in CONTRACT FOR LIGHTING IN THE CITY Guadeloupe. A major water supply and conveyance OF PARIS project was completed for the Conseil Général in On July 1, 2011, Evesa, a company in which Aximum Guadeloupe. Streamlining plans are still ongoing. holds a 15% share, was awarded a ten-year high French Guiana recorded a drop in revenue in the energy performance contract for public lighting wake of the completion of major projects such as and tra$ c lights in the City of Paris. The contract the Apatou – Saint-Laurent road or the link between involves assistance in project management and Saint-Georges and the Oyapock bridge. Teams operations for 180,000 street lights and 140,000 worked to extend aprons at the Rochambeau mili- tra$ c lights, with a commitment to provide 30% tary airport. energy savings over a ten-year period.

6 Colas Group Report of the Board of Directors International and French Europe overseas territories Revenue in Europe, excluding France, amounted to 1.9 billion euros, stable compared to 2010. Revenue from international subsidiaries and French overseas territories amounted to 5.2 billion euros, up Northern Europe recorded a slight increase in rev- nearly 4.3% compared to 2010 (3.3% with unchanged enue of 1% (+10% with sales of refi ned products), structures and comparable exchange rates). A with good business in Belgium and Switzerland o! - breakdown by region shows that North America setting budget cuts in Ireland and Great Britain. accounts for 46% (45% in 2010), Europe (excluding In Great Britain, the economic backdrop was tough, France): 36% (37% in 2010), Africa/Indian Ocean/ in the wake of an austerity plan that led to a freeze Asia/Oceania/other countries: 18% (18% in 2010). in local investment. Nonetheless, revenue at the Business in the international and overseas territo- road subsidiary Colas Ltd remained high – albeit ries’ road construction activity is quite similar to slightly down from 2010 – due to a well-thought- the same sector in mainland France. Contracts are out range of business activities. These include long on the average larger in North America, central term MAC contracts (Managing Agent Contractor) Europe and the Indian Ocean. The Road business in for the management and maintenance of the British some countries may encompass civil engineering motorway and road network (four contracts cover- projects (engineering structures) required on coming Areas 14, 10, 7, 12, i.e. 3,500 km, including engi- prehensive road and highway projects. Road work neering structures), a strong industrial foothold is also supplemented by upstream industrial activi- and the development of airport runway mainte- ties (aggregates, asphalt mix, emulsion, ready-mix nance. The PFI for the upgrading and maintenance concrete). The amount of products sold to third of the city network in Portsmouth is still ongoing, parties can be higher than in France. Specialized much to the satisfaction of the customer and users. activities in the international divisions include pipes In Ireland, despite an extremely di$ cult economic and mains, civil engineering, railways, signs and environment due to austerity plans, revenue is signaling in Europe, building, civil engineering, comparable to 2010. signaling, and waterproofi ng in the Indian Ocean, road marking in Canada and in Alaska, waterproof- In Belgium, revenue in the road business has surged, ing in Quebec, civil engineering, railways, signaling, thanks to a good level of public investment ear- and waterproofi ng in Morocco, railways in Vene- marked for the upgrading of the road network that zuela, Egypt, etc. In Asia and Australia, Colas’ busi- had been seriously damaged by harsh winter ness mainly focuses on the production, storage, weather in 2009 and 2010. transformation and trade of oil products (bitumen In Switzerland, business fi gures remain high, prac- and emulsion), except for a recent foothold in the tically identical to the previous year, thanks to a railway market in Malaysia. number of road, highway and rail infrastructure In every country and every region (except for the projects (tramways, regional lines). United States and Canada where there is no nation- In Denmark, revenue is on the rise, boosted by gov- wide market per se), Colas is ranked among the ernment investments in road works and by good leaders in the road construction market. Group com- weather conditions. panies compete with both national companies and subsidiaries of major international groups (construction, cement-makers, materials producers). Revenue in central Europe has dropped 17% compared to 2010. The new slump (57% drop over a three-year period), is the fruit of shrinking public investment, mainly in Hungary, the Czech Republic and Slovakia. Poland, however, is benefi tting from the positive impact brought on by the Euro 2012 Soccer championship. In addition, a clear drive to prefer profi tability over volume amidst very tough competition has pushed prices down. The Colas companies are still endeav- oring to streamline to make for a better fi t with the market and with strategy. In Romania, Colas decided to cancel the Motorway A 2 contract

Report of the Board of Directors Colas Group 7 between Cernavoda and Constanta in the wake of now working on maintenance and network man- major contractual issues (in particular, a 15-km shift agement covering 480 km of roads, 84 bridges and in the original trace and delays in hand-over of engineering structures, and 19,000 streetlights. land) that prevented the work from being per- MAK: PPP for M6-M60 Motorway in Hungary formed as planned. The transfer of the subsidiary MAK, a concession company in which Colas holds a SCCF Iasi (road works and civil engineering), 30% stake, has been awarded a thirty-year PPP con- located in eastern Romania, was signed at the end tract to build and operate two new sections of High- of 2011 and should become e! ective as of the ways M6 (50 km) and M60 (30 km), for a total of beginning of 2012 once the free trade authorities 80 km in the southwest of Hungary. Launched at the have given their agreement. When the transfer has end of March 2010 for a duration of twenty-eight been completed, the Group will focus its business years, the operation and maintenance phase on the on industrial activities (quarries) and bitumen dis- two sections, performed by MAÜ, a dedicated com- tribution. In Croatia , Colas acquired the remaining pany in which Colas owns a 25% stake, continued to shareholders’ equity in its subsidiary Cesta Varaz- provide satisfactory service levels for the Hungarian din, and now wholly owns the company. government. Among the year’s most noteworthy projects, one can cite: the refurbishment of the main runway at Manchester Airport, the extension of the main runway at London-Southend airport in Great Britain; North America the refurbishment of the Saint-Maurice road with Revenue totaled 2.4 billion euros, up 6.6% com- Nanosoft® noise-reducing mix and the construction pared to 2010 (8.5% with comparable exchange of a new tramway line in Geneva, Switzerland; the rates and identical scope of business). refurbishment of Highway E34 near Antwerp and the construction of the Hollain-Péronnes waste UNITED STATES water treatment plants in Belgium; the widening of a 12-km section of highway in the south of Jutland As stimulus packages drew to a close, creating a and the refurbishment of a 4-km section of high- more di$ cult economic environment, the Colas way using noise-reducing mix near Copenhagen, companies, which operate out of 29 states, enjoyed Denmark; the construction, reinforcement and wid- an increase in revenue compared to the previous ening of sections of Motorway M3 and M0 in Hun- year, due in part to the full-year consolidation of gary; the construction of a section of Motorway D3 Baker and Ballou, two companies acquired in 2010. in the Czech Republic; the construction of highway Harsh weather caused delays during the fi rst half bypasses to the east and west of Poznań, Poland. year, but this was o! set during the second half year. The long-term federal infrastructure program Responsible development techniques are gaining called SAFETEA-LU was extended for an additional ground: projects involving plant-based binders year in 2010 and renewed in 2011 for the fi rst half were performed in Belgium, Switzerland and Great year of 2012. Colas companies rolled out plans Britain; noise-reducing mixes progressed sharply in aimed at improving their organization (exchange of Switzerland, Denmark and Poland; cold recycling is best practice) and continued to control operating making headway in Switzerland. costs. In addition, the subsidiaries pursued the promotion of cost-wise pavement maintenance tech- CONCESSIONS, PFI, PPP niques and aimed to diversify their businesses with Ensign: PFI for the city network in Portsmouth, a new focus on civil engineering and structures. Great Britain Furthermore, the companies moved on with their strategies targeting a better control of bitumen The fi rst ever public-private partnership involving supplies, backed by a network of depots and termi- the upgrading and maintenance of city networks nals along with greater diversifi cation of the cus- signed in 2004 for a duration of twenty-fi ve years, tomer base over the last three years. They also the Portsmouth PFI is a source of satisfaction for continued to reinforce their footholds in states in both the customer and users alike, as seen in inde- which they currently operate. Moreover, a division pendent opinion polls carried out by NHT (National was created, dedicated to the study of new types Highways & Transport Network). Two years after of bids, such as design-build contracts and public- the upgrading phase was completed, teams are private partnerships. These actions helped the companies perform well, bearing witness to their strength and resilience in 2011’s highly competitive market.

8 Colas Group Report of the Board of Directors CANADA Elsewhere around the world Despite harsh weather during the fi rst half year, revenue at ColasCanada increased sharply, boosted MOROCCO by an ongoing program to upgrade infrastructure in Quebec, buoyant private investment in the West In an increasingly competitive, sluggish market, rev- (mining, energy in Alberta) and acquisitions in enue at the Group’s road companies is down slightly Quebec and British Columbia. Against a dynamic compared to 2010. Among the year’s most signifi - economic backdrop, 2011 was once again a good cant projects, one can cite the earthworks for the year for Colas companies in Canada, thanks to an Tangiers – Kenitra high speed train line including 3 extensive network of high-quality business units 5,200,000 m of cut and 1,000,000 tons of fi ll, and and a business model based on vertical integration the construction of the platform and other ancillary (bitumen storage; production of aggregates, asphalt work on a 9-km section of the Casablanca tramway. concrete, road marking paint; road works). IN WEST AFRICA

Among the highlights of 2011 for Colas North In Benin, where the market is very low and competi- America: tion from Chinese companies has strongly impacted – United States: widening of the roadway and con- prices, construction work continues on the 37-km struction of two engineering structures at the Blue section Djougou – Ouaké Route, with special focus Mountain interchange in Franklin county, Pennsyl- on good corporate citizenship and environmental vania; construction of a greenbelt from the univer- protection. sity campus to downtown Syracuse, New York; In Togo, sales have dropped o! sharply; work on upgrading of a section of highway in Blytheville, the civil engineering project in the Port of Lomé is Arkansas; refurbishment of a section of Inter- nearing completion. state 90 in Sheridan, Wyoming; refurbishment of pavement on a 26-km section of Interstate 26 in In Gabon, business is still enjoying growth, notably Spartanburg County, South Carolina; construction with construction and renovation work on the city of a section of highway including six engineering streets of Libreville as part of the African National structures in Savannah, Georgia; application of Cup 2012, along with the extension of the main run- noise-reducing mix on sections of Routes 199 and way at the Port-Gentil Airport. 288 in Virginia; work on the Burbank airport in Cal- The Ivory Coast is currently awaiting major road ifornia; refection and extension of a runway at the infrastructure upgrading projects fi nanced by inter- Anchorage International Airport in Alaska; national funding. Work on refurbishing streets in – Canada: in Quebec, upgrading of Route 185 to Abidjan is currently underway. Highway 85 for the Trans-Canada Route in Temisc- ouata, the extension of Highway 73 in the Beauce INDIAN OCEAN AND SOUTHERN AFRICA region and of Highway 410 in Sherbrooke as part of preparations for the Canada Summer Games in In Mauritius, where the market remains buoyant, 2013; in Alberta, extension and refurbishment at the the Group acquired 50% of the equity of Gamma Fort McMurray Airport, construction of an inter- Materials Ltd, specialized in the production and modal rail platform in Calgary, refurbishment of sales of construction materials. The most notewor- pavement on Highway 88; in British Columbia, sup- thy projects that are currently underway or were ply of ready-mix concrete for the construction of completed in 2011 include the construction of the the Waneta dam; in Saskatchewan, widening of a Port-Louis highway bypass, a 16-km section of section of highway in North Battleford. highway between Terre Rouge and Verdun, the extension and refurbishment of a runway and the In the United States, warm mixes accounted for construction of a new taxiway at the airport. 32% of total asphalt mix production in 2011 (14% in 2010), ranking Colas companies as the leading In Djibouti, the Group’s business includes roads, users of this technique. Reclaimed Asphalt Pave- building and a variety of diversifi ed contracts includ- ment or RAP is also very widespread, amounting to ing drainage for the City of Djibouti using interna- 22% of total production (18% in 2010). In Canada, tional fi nancing and the construction of a parking special focus continues to be placed on warm zone on the Japanese military base. mixes and cold in-place recycling.

Report of the Board of Directors Colas Group 9 In Madagascar, where lasting political unrest In Thailand, business was penalized by cuts in gov- remains strong, business has been streamlined to ernment spending and by very bad weather. In allow the Group to weather out the storm until new Malaysia, production at the Kemaman bitumen projects have been launched. Road works at the refi nery was hindered during the fi rst half year due Tamatave nickel site are still underway, a structure to raw material price issues. In India, an eighth crossing the Mahajamba is being erected and a emulsion plant was completed in Haldia. Hincol 30-storey o$ ce building was completed in Antana- recorded business fi gures that are comparable to narivo. 2010 in a market impacted by a number of delays in projects. In Indonesia, the bitumen trading busi- In the Comoros Islands, political stability has paved ness enjoyed sharp growth despite a sluggish bitu- the way for the return of investors and international men market. A fi fth bitumen depot was opened in fi nancial backers. After eight years of absence, the Medan, in northeast Sumatra. The road construc- Group’s company began doing business again. tion business is buoyant and maintenance contract Some 43 km of road works are currently being perfor mining roads were renewed in Borneo. In Vietnam, formed on the archipelago’s three islands. the bitumen market is down due to an overall eco- In southern Africa, the market was boosted by rising nomic slowdown, and due to unfavorable weather raw material prices. Business was good throughout during the second half year. The Group’s bitumen the zone, in particular in South Africa, where mainte- trading business has hence slowed. nance work has replaced infrastructure projects for the 2010 World Soccer Cup, as well as in Zambia, Namibia and Kenya. INTERNATIONAL RAILWAY PROJECTS Colas Rail Ltd enjoyed buoyant business in Great ASIA AND OCEANIA Britain, with work on track renewal in the frame of In New Caledonia, the road business has been long-term MAC contracts and a new MAFA mainte- boosted by the dynamic economy in the North nance framework agreement for the southwest Province, with earthworks that are part of the con- region signed in 2011. Colas Rail Ltd has thus construction of the Koniambo nickel plant, along with fi rmed its position as market leader in long-term infrastructure work. The Group is currently building track renewal contracts. an industrial facility in Vavouto and a 4-storey gov- Elsewhere around the world, new contracts were ernment building in Noumea. secured in 2011, including a new line for the Los In Australia, Colas Australia and its subsidiaries Teques metro in Venezuela and a 17.7-km extension have enjoyed strong growth, operating in bitumen of the Kelana Jaya light metro in Kuala Lumpur, storage and trade along with the production and Malaysia. In Morocco, work is currently underway to sales of bituminous binders via a network of depots lay track on a 9-km section of the Casablanca tram- and plants located in Sydney, Brisbane, Perth and way, in addition to recurrent maintenance and Melbourne. upgrading work performed by the Group’s local rail company. Work continued on the construction of In Asia, Colas operates in eight countries with a phase 2 of the Cairo metro line 3 in Egypt. central line of business focused on the production, distribution and sales of bituminous products. All of the Group’s units recorded an improvement in business fi gures against 2010 despite a slumping bitumen market. Bitumen sales at Tipco were down (800,000 tons compared to 1,000,000 in 2010).

10 Colas Group Report of the Board of Directors Techniques, Network organization Research and for techniques The Group boasts a tight-knit internal technical Development network that operates internationally. Every new company that joins the Group helps reinforce this valuable system, which works hand in hand with Research has been one of the driving forces of operational teams in the fi eld. Colas’ strategy for many years. As the leading private research center in the road Backed by a portfolio of more than 130 patents fi led industry, the Campus for Science and Techniques in France and around the world, with products used (CST) and its eight laboratories in Magny-les- throughout the Group worldwide, Colas is a pioneer Hameaux, near Paris, are at the heart of the Group’s in the development of new techniques able to adapt innovation program. Here, teams put their research to a wide range of infrastructure needs in ever- skills and expertise at the disposal of Group sub- changing national markets and diverse weather sidiaries, both in France and elsewhere around the conditions, from the sub-zero temperatures of world, on conventional projects, major projects or Alaska to tropical climates in Africa and Asia. more complex contracts such as tramways, PPPs, In 2011, the R&D budget was stable at 69 million PFIs, and concessions. Over 90 people work at the euros, with 60% in France (based on the defi nition CST, from engineers, technicians, physicists and provided by the OECD including research, experi- chemists to material experts and calibration spe- mental development, technical activities of labora- cialists. tories, IT). Nearly fi fty decentralized laboratories and one Colas’ research and development policy focuses on hundred engineering design o$ ces – specialized in anticipating and responding to the needs of trans- roads, civil engineering, building, deconstruction port infrastructure customers (public and private), and more – work in liaison with the CST both inside users and neighboring residents, regarding quality, and outside of France. They contribute to the safety, environmental protection (in particular in Group’s overall research e! ort and o! er tailor- the fi elds of energy savings, reduced greenhouse made technical support to local projects. gas emissions, decreased consumption of materi- Each unit has its own state-of-the-art laboratory als, noise reduction and greater awareness of visual and computer tools, which are constantly renewed appeal) and costs. The Group aims to improve to remain at the cutting edge of technological existing technologies, design new products and innovation and customer needs and requirements: o! er a broader range of services. Its expanding material analysis equipment, sophisticated simula- technical skills and know-how are also refl ected in tion and risk measurement software, modern aus- its new lines of business and new o! ers, e.g., its cultation apparatuses. Research teams can thus activity in the bitumen sector for the last several help meet customers’ needs and optimize bidding years and new contracts like PPPs in which mainte- by using alternative technical solutions. nance and improved service levels require accurate technical analysis of existing roads. Ongoing In all, the Colas technical network includes 2,000 improvements to know-how focus in particular in engineers and technicians hard at work in the the fi elds of mineral, organic and plant chemistry, Group’s laboratories (1,000 people) and engineer- design of road and rail infrastructure and applied ing design o$ ces (1,000 people), roughly 45% of physics. whom work in France. In 2011, the Group’s research programs had to adapt, as was the case in previous years, to a rapidly changing market, in particular in France in the wake of the French Grenelle Environmental Round- tables, in addition to reinforced standards for products in Europe with the application of REACH legislation covering chemical substances. The French Government continued to support innovation in the road industry, a program that was relaunched in 2007.

Report of the Board of Directors Colas Group 11 Reducing tra# c noise has long been a priority at Responsible Colas, and improvements continue to be made to development: noise-reducing surfacing techniques in this aim: latest generation of Nanosoft® and Rugosoft® noise- a key focus for R&D reducing mix developed by Colas, Microville® HP To save energy, reduce the consumption of materi- (fi rst project in 2011) and Picoville® at Screg and als and diminish carbon impact, teams at Colas Miniphone® S 0/4 at Sacer. The Group’s safety and R&D and technical divisions focus on the following signaling company, Aximum, also provides high issues for the road sector: performance noise barriers. • Lowering manufacturing temperatures to produce Lastly, improving the environment can also be a warm, semi-warm and cold mixes (3E® energy-e$ - question of creating visually-appealing surround- cient asphalt mixes at Colas, Compomac® at Screg, ings: research and development teams focus on Ecofalt® at Sacer) and low temperature mastic asphalts highlighting the natural color of aggregates, with- (Neophalte® BT at Smac); out bitumen, thanks to translucent plant-based binders. Sacerlift®, a product designed to renovate • progressively replacing synthetic chemicals and and clean porous stone surfaces, won the 2011 Inno- petrochemical products with plant-based prod- vation Award at the Congress for French Mayors ucts, such as Vegeflux® fl uxing agent or Vegeclair® and Local Authorities. binder, the carbon negative range launched in 2010 and applied in 2011 notably on the visitors’ center at In the field of road safety and user information, in the Mont-Saint-Michel and on the Amiens Veloroute addition to designing highly skid resistant road bikepath; surfacing that drastically cuts braking times, teams also spotlight the creation of energy-autonomous • absorbing nitrogen compounds emitted by vehi- automatic tools to collect, process and display data, cles using innovative surfacing (Colclean®); as well as the design of new plant-based safety • recycling used materials, with in particular the marking processes that do not give o! any volatile use of reclaimed asphalt pavement (RAP) from old organic compounds (e.g., Vegemark® water-based demolished roadways to manufacture new mixes road marking paint with plant-based binder (3E®+R mixes – certifi ed by the French Ministry of designed by Aximum). Ecology, Sustainable Development, Transports, Hous- Lastly, to contend with tighter local budgets, the ing, in-place recycling with Novacol® and Valorcol® Group has been focusing on developing cost-wise at Colas, Recycold® V at Screg); products and processes that provide equal or • decreasing the thickness of road courses (Col- improved performance, such as road maintenance grill® R surfacing combining a fi berglass grid and techniques using surface dressing or safety-enhancing asphalt mix, winner of the 2010 Sustainable Devel- long lasting high grip surfacing (Optigrip® designed opment Innovation Award, and applied on a project in 2011 by Sacer). for the Conseil General de l’Aude). These targets and research programs are in line with Teams from Colas played a major role, alongside the commitments made in France by the French specialists from USIRF, in designing an industry- national public works federation (FNTP) as part of a wide eco-comparing software tool SEVE®, which voluntary agreement signed on March 25, 2009. has enabled a number of contracts to be won with eco-friendly technical alternatives (reduced energy consumption and greenhouse gas emissions).

12 Colas Group Report of the Board of Directors surface treatments. In Canada, focus continued to Using special products be set on developing warm mixes using additives and techniques around or foam bitumen. 2011 saw a sharp jump in the use of RAP, in particular with in place cold recycling. the world Colclair® light-colored binder was applied for the In 2011, a number of projects undertaken by interna- fi rst time in Quebec as was noise-reducing, skid- tional and French overseas units used the Group’s resistant Rugosoft®. Tests were performed to cer- special products and processes: tify water-based road marking paint, and heavy – in Belgium, Vegeclair® plant-based binder was duty skid resistant surfacing was developed in the used for two hot mix projects; west. A Central Laboratory was opened in Edmon- – in Switzerland, there was a surge in interest for ton, Alberta and Colas Solutions™ continued to the latest generation of noise-reducing mixes called deploy innovative marketing solutions; Nanosoft®, along with Valorcol® cold in-place recy- – in Martinique, Rodal® open-graded percolated cling and Vegeclair® plant-based binder; mix was applied and teams are now using road – in the United Kingdom, French-designed airfi eld base asphalt concrete with 25% RAP; asphalt concrete was used to reinforce and reno- – in French Guiana, the fi rst warm mixes with CWM® vate runways and a fi rst-ever project using French liquid additive were employed on a CNES project; standards to upgrade the main runway at the – in Benin and in Togo, contracts for work on piers Manchester Airport. Vegecol® binder was used in were won using technical alternatives; surface dressing applied as part of the work done – in Morocco, noise-reducing Nanosoft® mix was for the London Olympics in 2012; applied on a structure built for the Rabat tramway – in Denmark, Vegecol® mixes were employed for and Emulfi x® bitumen savings process was used; the fi rst time and noise-reducing mixes continued – in the Indian Ocean and Pacifi c Rim, warm mixes to develop; containing CWM® were involved in the majority of – in Poland, the fi rst Active Joint® project was com- asphalt projects in Mayotte, high modulus mixes and pleted and Rugosoft® noise-reducing mixes remained Betofl ex® modifi ed bitumen were highly successful popular; on the Mauritius Airport project; RAP techniques are – in North America (United States and Canada), being developed, along with warm mixes containing FiberMat, a crack-resistant technique continued to CWM®, including with modifi ed binders such as gain ground, Vegefl ux plant-based binder was Rufl ex® on Reunion Island; special concrete was employed, a North American eco-comparison tool developed by the Central Laboratory in Madagascar was designed in collaboration with the Campus for to build a new skyscraper, Tour 786, some 100 meters Science and Techniques in France. In the United high, in Antananarivo; Rufl ex® and Betofl ex® modi- States, Ecomat® warm mix enjoyed strong growth, fi ed binders were manufactured for the fi rst time with an overall tonnage multiplied by 10 compared and CWM® was used to haul mix over long distances to 2009, i.e., 32% of total asphalt mix production, in New Caledonia; and reclaimed asphalt pavement also progressed – in Asia, special bitumen was developed for air- (22% of total mix production). In June 2011, Colas port projects in Thailand, Cambodia and Vietnam; Solutions Technology Center (CSTC), was inaugu- microsurfacing was developed on heavy tra$ c rated, o! ering a dedicated development and train- sites; colored micro surfacing was applied in Khao ing center for pavement preservation techniques. A Yay national park and noise-reducing mixes were new prime coat called EcoPrime™ with no volatile applied in Thailand. Emulfi x® was used in two plants fl ux was launched, along with DustGrip™ dust in India; Novachip® mix and emulsion-based mix were reducer and Tu! Bond™ emulsion for high-perfor- applied in Vietnam; Aquaquick® mix was employed mance asphalt concrete. Teams continued to work in South Korea. hand in hand with the Group’s Campus for Science and Techniques in France regarding emulsions designed for recycling, micro-surfacing and other

Report of the Board of Directors Colas Group 13 Responsible Development

Approach Colas has developed an approach to responsible development (see www.colas.com) based on the convic- tion that it can and must meet the needs and aspirations of its customers and society in a responsible manner. This approach takes into account the issues of contemporary society and its sometimes contra- dictory objectives: social cohesion, climate change, transportation needs, improving living conditions, etc. As a cornerstone of its responsible development approach, Colas has mapped out the interrelationships between its stakeholders:

Customers Human Communities Environment Suppliers Shareholders resources and their and inspection institutions bodies Customers Human resources Communities and their institutions Environment and inspection bodies Suppliers Shareholders

Strategic challenge Major impact Considerable impact Average risk Low risk Non-significant risk

Three main lessons emerge from this assessment: For each of these targets a policy of continuous pro- • our people in the fi eld play a key role in determin- gress has been established and is coordinated at ing how Colas is perceived; each level of the organization. For most of these tar- • environmental considerations are critical to this gets, global performance indicators and goals have image; been specifi ed. This approach seeks to foster a long- • customers are an important source of feedback at lasting culture of continuous improvement in the a local level as part of the ongoing dialogue between fi eld, throughout Colas’ 800 work centers and 1,400 Colas, communities and their institutions. material production sites. It was rated AA+ in 2010 by extra-fi nancial rating agency BMJ specialized in Based on the analysis of stakeholder interrelation- the rating of corporate sustainable development ships and risks as shown in the table above, Colas’ and social responsibility. This motivation is also approach to responsible development is under- refl ected in the wide variety of actions the Group’s pinned by three strategic targets and fi ve major operating units undertake in their own communities. targets. The vision of Colas’ business activities is thus The three strategic targets are critical for Colas to enriched and transformed by the collective appro- develop its business and thrive in the long term, priation of corporate social responsibility. and their achievement depends largely on Colas. They include: human resources development, social As far as the dialogue with non-contractual stake- acceptance of production sites, and ethics. Colas holders is concerned, few issues justify a global does not have as much leeway in meeting its other approach, whereas exchanges on a local level are fi ve targets, even though some, such as energy, numerous, with neighboring residents, local govern- may be considered every bit as important. These ments, schools, the social sector, etc. Colas has a major targets include: safety, corporate citizenship tightknit local network and maintains ongoing dia- in developing countries, energy and greenhouse logues with its stakeholders (1) . On a global level, it is gases, recycling, and chemical hazards. still di$ cult to identify structuring, general issues

(1) See “Community acceptance of production sites” section.

14 Colas Group Report of the Board of Directors that would justify the organization of dialogues with global, hence international, stakeholders. To date, the sole issue that Colas deems relevant on a global Under the aegis of the French Ministry of level involves bitumen fumes. Colas has played a “ Ecology, INERIS specializes in expertise and major role in communicating with customers, scien- research in the fi eld of risk prevention for tists, employees, government labor departments technology and industrial pollutions. As Pro- and workplace health bodies (1) . To help foster refl ec- fessor Ortwin Renn from the University of tion, Colas participates in strategic committees and Stuttgart has said, certain risks can be called commissions gathering stakeholders from other ‘indirect’, meaning that the assessment an fi elds, such as CORE at the INERIS (2) , COS at the individual will make of a given risk does not FRB (3) and the COS Environnement et Responsa- depend on his/her own experience – every- bilité Sociétale at Afnor (4) and continues to endeavor one has seen a fi re or a car wreck – but rather on the degree of trust that the individual has to give more meaning to its corporate patronage in the person who is explaining the risk to actions. him/her.

ORGANIZATION IMPLEMENTED TO MONITOR When dealing with risks, the fact that one SUSTAINABLE DEVELOPMENT PERFORMANCE trusts an expert is inseparable from scientifi c and technical expertise. This is why INERIS In 2011, the Group’s Environment Department took has recently reinforced its governance by on greater cross-functional responsibilities in the creating CORE, a scientifi c committee for the area of sustainable development, expanding its dia- orientation of research and expertise. The logue with all other functional and operational committee members include elected o! cials, departments for the analysis and verifi cation of trade associations, NGOs, industrialists, aca- indicators and the drafting of detailed reports sent demics and government representatives, who to the chief operating o$ cers of the 67 “head enti- gather together to help defi ne work pro- ties” (national head o$ ces or subsidiaries), who are grams for INERIS. I truly appreciate Colas’ responsible for fi rst-level internal control. The Envi- commitment and diligence, and thanks to ronment Department also coordinates the renewal CORE, we at INERIS can share issues very far and updating of action plans in this area. More spe- upstream. cifi c objectives and more targeted types of feed- This relationship helps us ensure that we are back are agreed with some of the head entities. To in line with society’s expectations, thus favor- implement these action plans, chief operating o$ c- ing a climate of trust and dialogue when we ers rely on the support of management personnel present our results. The fact that Colas is within their entities responsible for areas such as involved in the committee is also an opportu- workplace safety, energy, environmental a! airs, nity for elected o! cials and NGOs to better quality, health, diversity and road safety, in accord- understand – sometimes even to discover – ance with Colas’ decentralized organizational the viewpoints, questions and expectations of structure. The organizational challenge is to ensure industries, and vice versa. This is the corner- the balance between bottom-up contributions and stone of trust, indispensable in the fi eld of top-down cohesiveness. In 2011, a project was risks.” established to examine the robustness, adaptability and renewal of formal quality management sys- Vincent Lafl èche, Managing Director, INERIS (1) tems. (1) National Institute for industrial environment and Following the global roll-out in 2010 of a new risks, France. reporting tool designed to harmonize all non-fi nancial indicators used by 770 legal entities by means of precise defi nitions, 2011 saw a number of improvements in the use of this tool, which now (5): – takes into account the relevant minority interests; – has enhanced the reliability of quantitative information with a view to later certifi cation; – has introduced new indicators, whose reliability is still subject to verifi cation, including those examining alternative means of transport and biodiversity.

(1) See “Chemical risks” and “Operational risks” sections. (2) Steering committee for research and expertise at the National Institute for industrial environment and risks, France. (3) Strategic steering committee at the French foundation for biodiversity research. (4) French standard organization. (5) Methodological guide to non-ﬁ nancial reporting accessible via the Colas Web site.

Report of the Board of Directors Colas Group 15 Three strategic targets

Renewal and development of human resources Colas must ensure the renewal of its organization across generations. Colas’ human capital and its enhance- ment are key to the Group’s development and its long-term viability. The main issues addressed in this area are recruitment, diversity, retention and training.

RECRUITMENT Recruitment in 2011 by geographic area

Zone Managers Workers Total Mainland France 1,217 1,671 2,888 International 886 1,937 2,823

incl. Europe 253 283 536

North America 309 1,171 1,480 Africa/Asia/Indian Ocean 324 483 807 Total 2,103 3,608 5,711

In 2011, Colas maintained an active recruitment policy: 5,700 people were hired (up from 4,500 in 2010), including nearly 3,000 in mainland France. The Group’s recruitment goals are advanced through media campaigns, ongoing contacts with educational institutions at all levels in the countries where Colas has operations, and follow-up tools currently being rolled out for the Group’s human resources information system (1). Sta! joining Colas often come from the local area, by way of internships (a total of 2,136 in 2011, including 488 outside France, compared with 2,260 and 275, respectively, in 2010), work-study and appren- ticeship programs across all qualiﬁ cation levels (559 in 2011 versus 380 in 2010), as well as temporary employment, which allows both the entity involved and the prospective hire to get to know and evaluate each other prior to the o! er of an open-ended employment contract.

WORKFORCE Workforce by country in 2011 (rolling 12-month average)

Managers and engineers O$ ce sta* and supervisors Workers Total

Country 2010 2011 % 2010 2011 % 2010 2011 % 2010 2011 %

Mainland France + overseas depts. and territories 5,740 5,689 – 0.89 9,629 9,624 – 0.05 22,998 22,579 – 1.82 38,367 37,892 – 1.24 Europe 961 949 – 1.25 3,215 3,033 – 5.66 8,478 7,728 – 8.85 12,654 11,710 – 7.46 (excl. France) Total Europe 6,701 6,638 – 0.94 12,844 12,657 – 1.46 31,476 30,307 – 3.71 51,021 49,602 – 2.78 North America 553 566 2.35 1,776 1,909 7.49 5,118 5,359 4.71 7,447 7,834 5.20 Africa/Asia 367 379 3.27 927 957 3.24 3,805 3,317 – 12.83 5,099 4,653 – 8.75 Indian Ocean 163 114 – 30.06 552 437 – 20.83 4,613 3,562 – 22.78 5,328 4,113 –22.80 Total 7,784 7,697 – 1.12 16,099 15,960 – 0.86 45,012 42,545 – 5.48 68,895 66,202 – 3.91

The Group’s global workforce decreased by 3.9% in 2011. E! orts to promote sta! mobility and the synergies generated over the last several years, together with a number of major contract wins, have allowed for the e! ective adaptation of structures so as to avoid layo! s to the greatest extent possible. In France, a job protection plan is currently underway at Aximum in the Electronic products arm (in the wake of a transfer of some 37 jobs from one site to another, 7 employees accepted to follow their post and redeployments within the Group were proposed to the other remaining employees). In central Europe, ongoing reorganization e! orts resulted in 997 layo! s (131 in Croatia, 211 in Hungary, 30 in the Czech Repub- lic, 606 in Romania, 19 in Slovakia). In Romania, 80 employees were redeployed in the Group and the sale underway at year-end 2011 of the subsidiary SCCF Iasi to a local company included a guarantee that existing sta! would remain in their jobs. In Benin and in Togo, following a sharp drop in business, Colas has initiated employee support measures in connection with a layo! plan (a! ecting 42 employees) that exceed legal requirements.

(1) Known as SIRH in France.

16 Colas Group Report of the Board of Directors DIVERSITY (10.2% in 2010), including 22.8% of supervisors and management sta! (23.1% in 2010). On the basis of a Diversity is a key priority for the Group’s continuing study of women’s career paths at Colas subsidiar- development. In 2011, the Group pursued and fur- ies in France, areas for improvement have been ther expanded its e! orts in this area under the identifi ed. At the same time, senior management action plan launched in 2010: brochures, mini- has placed a priority on e! ectively increasing the poster campaigns, appointment of diversity corre- presence of women across the Group, even in tradi- spondents in the subsidiaries, special training tionally male-dominated occupations, and initia- sessions for managers, etc. tives are taking shape focusing on the organization Social integration: in France, Colas continued its of work, equal treatment of men and women, and partnership with Epide(1) and also maintained its career advancement, among other areas. program o! ering job opportunities to underprivi- Older employees: Colas subsidiaries in mainland leged young people in collaboration with local France have taken steps to promote the employ- organizations (for example, contracts for work on ment of older workers following an agreement con- tramway projects) in mainland France as well as cluded with employee representatives setting a the overseas departments. Across the Group’s minimum employment rate of 9% for employees international operations, many subsidiaries are aged 55 and over. stepping up their recruitment e! orts in black- spots for youth unemployment and in support of the integration of the long-term unemployed RETENTION (Australia, Belgium, Benin, Djibouti, United States, Both within and outside France, employees are paid Madagascar, Switzerland). more than the minimum wage. Remuneration is sup- People with disabilities: following the memoran- plemented by benefi ts, depending on local dum of understanding signed with Agefi ph (2) in laws relating to pensions, life insurance, health care 2009 setting a 3.5% target for the employment coverage, employee savings plans, etc. The Group’s (both direct and indirect) of people with disabilities remuneration policy is based on the recognition of to be achieved by early 2013, and once an initial individual e! orts and performance, with salary diagnostic/consulting phase has been completed packages comprised of a fi xed part and a variable resulting in the preparation of action plans by sub- part determined on the basis of annual performance sidiaries in mainland France, a two-year agreement reviews. Entities apply this policy independently, was signed in May 2011 with this same body. The making the necessary adaptations for their markets principal aims of this agreement are to promote and under centralized supervision. In France, profi t- awareness-raising initiatives, maintain disabled sharing agreements give employees a personal employees in their jobs, and integrate and expand stake in the success of Colas and the Group. Outside the use of contracts concluded with sheltered France, a policy intended to promote greater con- workshops. vergence of employee benefi t schemes continues to be applied within each major geographic region. Gender diversity To reinforce dialogue beyond the involvement of Breakdown of male and female employees in 2011 the employee representative bodies established in accordance with each country’s local labor laws Zone Management Workers Total (336 works councils in France and 20 central works Mainland France Men 81.2% 99.5% 91.7% councils), new human resources positions have Women 18.8% 0.5% 8.3% been created outside France and innovative initia- International Men 77.2% 93.9% 89.4% tives are being encouraged: employee satisfaction indicators, discussion forums on human resources Women 22.8% 6.1% 10.6% issues, etc.

In 2011, women represented 8.3% of the Group’s workforce in mainland France (8.1% in 2010), including 18.8% of supervisors and managers (18.7% in 2010). Outside of France, this ﬁ gure rises to 10.6%

(1) Social integration agency under the aegis of the Ministries of Defense, Employment and Urban A! airs. (2) Association for the management of a national fund to promote the employment of the disabled.

Report of the Board of Directors Colas Group 17 Payroll costs and social security contributions Company savings plan (PEE) and retirement savings in 2011 (Mainland France) plan (Perco) in 2011 (France)

in thousands of euros 2010 2011 % 11/10 Bouygues Number of % of Total Average PEE subscribers work- aggregate individual Salaries and wages 2,186,864 2,242,963 2.57% force employee deposits (1) Social security charges 756,815 800,838 5.82% deposits (in euros) (in euros) Total payroll Managers 3,449 60.63% 9,899,824 2,870 expenses 2,943,679 3,043,801 3.40% O# ce Employer contribution 24,417 23,669 – 3.06% sta$ and to PEE supervisors 4,106 42.66% 7,189,285 1,751 Proﬁ t sharing 10,984 15,256 38.89% Workers 5,156 22.84% 6,186,412 1,200 Total 12,711 33.55% 23,275,521 1,831 Incentive scheme 2,889 3,160 –

Total employer contribution, proﬁ t sharing and incentive Colas Number of % of Total Average scheme 38,290 42,085 9.91% Monétaire subscribers work- aggregate individual force employee deposits deposits (1) (in euros) Total payroll costs and (in euros) other advantages 2,981,969 3,085,886 3.48% Managers 99 1.74% 93,812 948

Outside personnel 313,944 335,540 6.88% O# ce sta$ and supervisors 124 1.29% 98,416 794 Workers 146 0.65% 110,382 756 Gross salaries per month in 2011 (France) in euros Total 369 0.97% 302,610 820

Number of employees

PERCO Number of % of Total Average 8,000 subscribers work- aggregate individual force employee deposits 7,000 deposits (1) (in euros) (in euros) 6,000 Managers 465 8.17% 853,966 1,836 O# ce 246 2.56% 206,405 839 5,000 sta$ and supervisors 4,000 Workers 143 0.63% 99,481 696

3,000 Total 854 2.25% 1,159,852 1,358

2,000

1,000

0 1,300/ 1,400/ 1,600/ 1,800/ 2,000/ 2,200/ 2,500/ 3,000/ 3,500/ 4,000/ >5,000 1,400 1,600 1,800 2,000 2,200 2,500 3,000 3,500 4,000 5,000

(1) Employee deposits excluding matching contribution from employer. Comparison between average annual salaries paid by Colas and minimum annual legal salaries by country or geographic area in 2011

in euros Mainland Hungary Great Switzer- Morocco Madagascar United Canada (3) France (1) Britain land (2) States

Average annual Machine salary paid driver 24,996 8,178 31,641 73,485 7,464 849 42,584 32,991 (1) by Colas Foreman 33,465 13,050 44,608 96,240 12,737 2,202 48,906 39,365 Minimum annual legal salary per country 16,380 4,120 15,140 58,006 2,410 372 11,655 12,773

For international operations, an exchange rate at December 31 is applied. (1) Average annual salary for the ﬁ xed portion. (2) The minimum salary is the salary for the construction sector. (3) The average minimum salary for provinces where Colas carries out business.

18 Colas Group Report of the Board of Directors TRAINING, MOBILITY AND INTERNAL EXEMPLARY PRODUCTION SITES PROMOTION Each site must implement progress measures that Training actions and hours in 2011 go beyond mere compliance with administrative or regulatory requirements. Obtaining environmental Hours Actions certifi cation is the preferred approach (under ISO France 580,072 34,138 14001, for example). Progress measures are docu- International 493,156 73,320 mented and assessed by using a system of checklists Total 1,073,228 107,458 covering most of the Group’s activities in the production of construction materials worldwide, which The Group’s training budget again represented 4% of is part and parcel of the internal control of opera- the payroll in France (as in 2010) and 2.5% outside tions. Some 1,700 Colas production sites and plants France (identical in 2010). Training programs are around the world are able to assess their own pro- o! ered to all sta! members regardless of their level in gress each year by responding to a questionnaire the hierarchy (51% for skilled workers), including tem- consisting of more than 100 fact-based questions porary employees, and cover all subject areas: apart relating to matters such as the storage of chemicals from fundamental training, new program content is and liquids, risk prevention (water, air, waste, safety, constantly being developed to support current action noise), formal procedures, and dialogue with local plans relating to contractual management, safety stakeholders. The Group’s Environment Department (39%), individual interviews, ethics, diversity, the envi- consolidates and analyzes the responses to these ronment, etc. Exchanges are fostered between questionnaires, communicates the results, and pro- employees pursuing training together, thus strength- poses the appropriate action plans, thus stimulating ening Group culture: this signifi cant and growing continuous improvement by individual operating investment by Colas helps to instill a broad set of val- units and the Group’s performance as a whole. ues. The transfer of know-how begins during the As of December 31, 2011, in terms of revenue gener- employee induction process and continues through- ated, 80% of Colas’ activities worldwide in the pro- out an employee’s career with tutoring, mentoring duction of construction materials were covered by at (1) and PQCs (awarded to 79 employees in 2011; 61 in least one of these two tools (certifi cations or check- 2010). Furthermore, the 924 members of Colas’ Com- lists) and the aim is to rapidly increase the coverage pagnons de la Route guild play a key role by ensuring rate to 90%. that the core values and techniques that have built the Group’s reputation are disseminated in the fi eld. In each country, the construction materials produced (aggregates, binders, bitumen, mastic asphalt, Internal promotion and mobility are an integral part asphalt mixes, concrete, paints, etc.) meet all appli- of the Group’s managerial culture. Mobility is both cable standards or certifi cation requirements (MSDS(2) , necessary for adaptation to market developments CE marking, and REACH (3) registration in the Euro- and a key aspect of career development at Colas, pean Union, etc.). Many production sites or plants opening up ever more diversifi ed opportunities for its are also working to obtain other voluntary certifi ca- employees. In order to support mobility e! orts, sen- tions, including those that may be obtained under ior management issued a direct questionnaire in 2011 eco-labeling schemes, for example. to encourage employees to consider these opportunities and increase the fl ow of information. Annual In 2011, a new program was launched to reinforce and performance reviews for individual employees are an underscore the contribution made by the Group’s essential priority, to shape career development and quarries and gravel pits to biodiversity: within its prepare the managers of tomorrow: their e! ective immediate area, each active site identifi es a pro- use is now one of the criteria for evaluating perfor- tected species and takes appropriate measures to mance of managers as much as results achieved in safeguard its habitat, entering into partnerships with the area of safety. scientists to build knowledge of the species, while ensuring that these actions are transparent to local residents. At sites where no such species may be Community acceptance identifi ed, bee hives are installed. To date, it is esti- of production sites mated that a quarter of the Group’s production sites already satisfy most of the criteria to be considered Colas operates a large number of sites producing as exemplary. construction materials, such as aggregates, ready- mix concrete, asphalt mixes, bitumen and emulsions. Public acceptance of these sites has become a more sensitive issue, particularly for local residents. Action plans are focusing on two imperatives.

(1) Professional qualiﬁ cation certiﬁ cates recognizing the acquisition of work experience. (2) Materials safety data sheets (mainly used in the OECD countries). (3) European Commission regulation on the registration of chemicals produced or used in the European Union.

Report of the Board of Directors Colas Group 19 ONGOING DIALOGUE WITH NEIGHBORING plant deliveries by equipping them with a tamper- COMMUNITIES proof weight system. Another example is Colas’ participation in an auction exchange for pre-owned Maintaining an open dialogue with local communi- construction equipment, subject to the control of ties makes it possible to understand their expecta- Tracﬁ n (2) in order to avoid money laundering and tions, explain the reality and constraints of production illegal transactions sites, and promote mutual comprehension to prevent crisis situations. In 2011, 44% of revenue at Colas materials production sites had set up a formal procedure for communicating with their local community Five other (vs 46% in 2010 with a narrower scope). The objective is to quickly exceed 50%. major targets As for Colas’ construction work, it has little direct impact on the environment: Safety – new construction projects account for less than Safety has been a top priority at Colas for many 20% of total works revenue. Their impact is assessed years. during the design phase and Colas’ role during construction is generally limited to complying with its PREVENTING WORKPLACE ACCIDENTS customers’ environmental requirements and propos- ing improvements when possible; Colas Group safety indicators (1) – the bulk of the Group’s projects average less Mainland Frequency Annual Security Fatal Fatal than 100,000 euros and involve the maintenance, French rate severity index work accidents replacement or modiﬁ cation of existing road or rail subsidiaries rate accidents on work- systems. These projects require no additional land related journeys area and the land used has already been surfaced or otherwise prepared. Environmental requirements 2009 9.66 0.42 4.06 2 0 therefore mainly have to do with e_ uent and solid 2010 9.97 0.48 4.79 1 2 waste, most of which is inert. 2011 11.23 0.49 5.50 2 4 In addition to its day-to-day e! orts to be a good

neighbor, Colas also deploys a variety of eco-friendly International Frequency Annual Security Fatal Fatal technologies, such as trenchless pipe replacement subsidiaries rate severity index work accidents and Nanosoft® and Rugosoft® noise-reducing pave- rate accidents on work- related ment, which is popular with neighboring residents journeys and drivers alike. Indeed, noise is considered to be the 2009 5.98 0.19 1.14 6 1 greatest environmental nuisance. Nearly 1 million m2 were applied in 2011. 2010 6.08 0.16 0.97 6 2 2011 6.17 0.23 1.42 6 0

(1) The di! erence in rates between the Group’s operations in France Ethics and elsewhere in the world is primarily the result of di! erences in Colas makes no compromises when it comes to regulatory defi nitions of work accidents in various countries. A much broader defi nition is used in France than in most other countries. ethical principles and integrity. Ethics are a cornerstone of the Group’s internal control system and Change in global frequency rate over the last 10 years violations are sanctioned. Employees who are exposed to corruption are regularly reminded of 20 France the need to scrupulously observe ethical rules and Europe (excluding France) training is systematically provided to top manag- Africa-Caribbean-Indian Ocean-Asia ers. Colas also complies with the Bouygues’ Ethics North America Code, which was fi rst released in 2006, is updated 15 annually and is systematically disseminated. An environment of transparent and fair competition best enables Colas to use its organization, technology and know-how most e! ectively and foster a 10 long-term partnership relationship with its customers. Transparent dissemination of information is the cornerstone of career satisfaction and managerial e$ ciency, since personal and corporate values 5 must be in harmony to sustain individual commitment and motivation. Colas has implemented many concrete actions, 0 often in collaboration with independent partners 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 such as l’AQP (1), to ensure traceability of asphalt

(1) Quality weighing association. (2) Information and action against money-laundering schemes.

20 Colas Group Report of the Board of Directors Having successfully achieved the targets for 2010 Comparison of the change in number of accidents and set fi ve years earlier, new targets have now been the vehicle fl eet in France between 1997 and 2011 set for 2015: an accident frequency rate (1) for per- 1997 2003 2007 2011 Variation manent employees lower than 5 in France and 2011/1997 lower than 3 outside France, with a 50% reduction Number in the accident frequency rate for temporary sta! ; of vehicles 13,746 20,588 25,380 27 247 +98% more than 300 accident-free entities in mainland Number of France; over 35% of the Group workforce world- accidents wide having received fi rst-aid training (with at least involving (1) two certifi ed fi rst responders at each work site). third parties 3,024 2,334 2,407 2 268 –25% Accident prevention at Colas is ensured through a Frequency 0.220 0.113 0.095 0.083 –62% variety of initiatives, supported in the fi eld on a (1) Accidents involving third parties deemed liable or not liable based on the principles of avoidability. day-to-day basis by specially appointed correspondents: risk assessment, employee awareness The accident frequency rate involving company campaigns making use of specifi c tools and soft- vehicles in France was nearly stable at 0.083 in 2011 ware, safety prizes, presentation of safety instruc- (0.082 in 2010) remaining at its lowest level since tions, video analysis of workplace behavior, a unit 1997, when this rate was 0.220. Accident frequency to monitor serious and fatal accidents, etc. In 2011, has thus decreased by 62% in fourteen years, even despite e! orts by management and preventionists, though the total vehicle and equipment fl eet safety indicators worsened by 5.50% in mainland increased by 98% over the same period. This pro- France and 1.42% elsewhere around the world, active approach to accident prevention is gradually compared to 4.79 and 0.97 in 2010. As a result, all being extended to all countries where Colas main- subsidiaries have been instructed to develop new tains operations. action plans. A number of entities have obtained safety certifi cation (OHSAS 18001, MASE, LO, etc.), accounting for 37% of the Group’s worldwide activ- HEALTH ities in revenue terms, as in 2010.

Change in the number of employees trained in fi rst aid People working in the asphalt paving industry “ should not be concerned about this new 2009 2010 2011 IARC (1) classifi cation. The two key animal France 11,225 11,441 11,865 studies on paving asphalt did not show any evidence of cancer risk, and the major IARC International 8,128 8,307 8,081 cancer study of people working in the paving Total 19,353 19,748 19,946 industry in Europe did not show any increased risk for cancer ; in conclusion, a possible haz- First-aid training is naturally benefi cial not just for ard (2) but no evidence of any risk.” those receiving this training, but for their colleagues, family members, friends, and society in general, Jim Melius (3) , DrPH, MD (occupational physician and at the same time reinforcing awareness of safety epidemiologist), expert in the fi eld of issues. In 2011, 19,946 employees were certifi ed fi rst Occupational Safety and Health, has worked responders, representing 32% of the workforce (31% for the Laborers International Union in 2010). of North America

(1) International Agency for Research on Cancer ROAD SAFETY (World Health Organization). (2) Hazard is something inherent to the product ; Colas has taken a highly proactive approach to pre- risk results from exposure to the product. venting road accidents since 1997, when it signed (3) After working for the NIOSH, and in a number of the ﬁ rst road safety charter in France. This charter National Academy of Sciences committees, Dr. Melius joined the LIUNA (a$ liated to the AFL-CIO), and is has since been renewed three times and has been now an administrator. He is currently Chair of the supplemented by a European charter that has also Steering Committee for the World Trade Center Medical Monitoring and Treatment Program. He also been renewed. Over 500 road safety correspond- helped draw up the IARC’s bitumen monograph ents across the Group promote best practices for in October 2011. driving, provide tips for accident avoidance, help with the organization of work, etc. In 2010 and 2011, more than 33,000 handbooks on safe and fuel-e$ - cient driving written for operators of construction equipment and truck drivers were distributed, while an energy e$ ciency campaign provided an opportunity to remind drivers of the safety beneﬁ ts of eco-driving practices.

(1) Number of workplace accidents resulting in a leave of absence × 1,000,000 / number of hours worked.

Report of the Board of Directors Colas Group 21 Colas has a comprehensive approach to protecting Society: the Group is involved in patronage pro- health that encourages healthy living, including ini- grams to support education, supply water and/or tiatives like a back clinic at Colas Belgium and med- ensure its viability through construction projects, ical partnerships in the United States. Improvements and provides humanitarian relief when fi re, fl oods in the design of construction equipment and adap- or other catastrophes strike nearby communities. tations to suit the needs of older workers are certi- Human rights: Colas has a policy of using and show- fi ed under Ergomat in France (currently being ing respect for local labor and of treating local rolled out to operations outside France). In France, communities, contractors and suppliers ethically. In Colas takes an active part in the identifi cation of doing so, the Group’s employees actively promote factors resulting in work-related discomfort for human rights in their professional dealings with the each job position and ways to reduce their impact rest of society. (noise and vibrations, improved ergonomics for working postures). Measures to reduce dust and stress also continue to be applied. In France, a “toolbox” of resources to prevent substance abuse has been developed and distributed to aid in the fi ght against addictions. Random on-site drug and I am a local Papuan fi shery academy lecturer alcohol testing is carried out in countries where “ from APSOR (Sorong Fishery Academy, such tests are permitted. Indonesia) who has been able to experience something that I had even never dreamed of The Group’s policy for the prevention of chemical before: I am now conducting my dissertation risks is dealt with elsewhere in this document.(1) in Paul-Sabatier University, Toulouse, France.

My dissertation is about rainbow fi sh (Mel- Corporate citizenship actions anotaenia Mairasi), an almost extinct kind of in developing countries fi sh that was found in a massive Karst area in Papua, Indonesia, through an extensive expe- Infrastructures cannot be exported. They are built dition involving multi-disciplinary teams, on site using local human resources. These projects known as the Lengguru expedition. The expe- are highly exposed to the cost of transporting dition was initiated by IRD (1), involving other heavy materials and require very short lead-times, local and overseas institutions, including with just a few hours for concrete to set or to apply APSOR. asphalt. Colas has not established its international presence in order to relocate and cut costs, but From 2007 until the last expedition in 2010, (2) rather to fi nd new business development opportu- ABS and Wasco had extensively funded nities and balance its exposure to country risk. part of the research in biodiversity science expedition. It was also the fi rst step for me on Colas has been doing substantial business in the long journey that fi nally brought me to Morocco and Madagascar for over fi fty years and an international preservation mission for the has also established operations more recently in rainbow fi sh. such countries as South Africa, Benin, Djibouti, Togo I have a close relation with ABS and Wasco and Gabon. In addition to its construction projects, management and sta# , and often speak with Colas contributes to the economic, social and cul- them of my studies and expeditions. Colas tural development and growth of these countries, through ABS and Wasco has allowed me while helping to protect their environments. to pursue my research; they truly show that Social: Colas has a progressive policy in terms of they care about environmental sustainability, pay, training, promotions and employee benefi ts, especially in Indonesia.” etc. Kadarusman Loba, Health: the Group’s e! orts to promote health ben- Lecturer at Apsor (3) efi t not only employees but also their families and (1) Research and Development Institute in France. local communities. These e! orts include, for exam- (2) Colas companies in Indonesia. ple, medical check-ups, health-care centers and (3) Local institution that trains in fi shing techniques campaigns to prevent AIDS, the fi ght against in Papua, Indonesia. malaria and other diseases. Environment: priority is given to protecting biodiversity, combating deforestation and managing waste.

(1) See “Chemical risks” and “Operational risks” sections.

22 Colas Group Report of the Board of Directors Energy and greenhouse gas Measuring instruments: in order to compute its energy e$ ciency, Colas must measure its fossil fuel The overall business environment is and will continue consumption, since electrical consumption only to be a! ected by the need to reduce carbon emis- accounts for a small proportion of its energy foot- sions. Aware of the importance of this need, Colas print. While it is fairly straightforward to track the o! ers a range of low-carbon-cost products and consumption of burners at its 580 mixing plants, it is technologies and prepares action plans to enhance much more complicated to accurately monitor the the energy e$ ciency of its business activities. consumption of over 70,000 machines and vehicles across over 800 works centers and 1,400 produc- ENERGY CONSUMPTION AND EFFICIENCY tion sites. Colas has therefore fi tted 2,000 of its Overall assessment: Colas has completed the calcu- machines and vehicles with energy consumption lation of its consolidated global carbon footprint, meters and is talking to equipment suppliers to pursuant to part 3a of the ISO 14064 standard, develop new common standards and transmit and which includes internal and upstream emissions. The receive data in real time. 2011 fi gures have remained stable at 12 million tons Contribution of employees: Colas has encouraged of CO equivalent, in line with expectations. The seg- 2 its equipment operators and truck drivers to reduce mentation clearly shows that heavy materials are their fuel consumption by 20%, by adopting eco- the main contributor. It should be noted however driving habits and switching o! engines when that this sort of global fi gure has a margin of uncer- equipment or vehicles are stationary. This campaign tainty of up to 20%, despite the quality of the assess- highlights the three advantages of eco-driving, ment work and the fact that the vertical integration which reduces costs, increases safety and helps of Colas operations facilitated access to much of the preserve the environment. Although emissions are upstream data. Still this calculation provides an still hard to quantify, everyone is clearly committed approximation that is necessary and useful in evalu- to this e! ort. ating the amounts of CO 2 emissions the Colas Group avoided in 2011, i.e., 160,000 tons (vs 130,000 in Asphalt plants: the energy consumption of plant

2010) or 1.5% of its total emissions. It also makes it burners has increased by 3% (18,000 t of CO 2 equiv- possible to break down the carbon footprint into its alent). These ﬁ gures are however stationary when main components and thus prepare more e! ective calculated with an unchanged scope of business. action plans. Overall, people at Colas are now clearly committed to ensuring better energy e$ ciency. At the begin- 4% 2% ning of 2012, a project team was formed to help 4% provide impetus to the energy saving program and to monitor its concrete results. 10% 63% ENERGY CONTENT OF CUSTOMER OFFERINGS Eco-friendly technical alternatives: to enable companies to compare eco-friendly alternatives using uniform criteria, Colas participated in an industry- wide project led by USIRF in France to develop 17% SEVE®, an eco-comparing tool that was made available via an extranet in July 2010 and opened to customers at the end of 2011. In addition, the French Ministry of Environment has encouraged the initia- Goods and services* Fixed assets tive, signing a charter in March 2009. In 2011 the Energy Waste eco-alternatives that Colas was thus able to successfully recommend made it possible to avoid the Freight Transport and travel of personnel emission of 29,000 tons of CO 2 (21,000 tons in 2010). Of the eco-alternatives proposed, 16% were For information, the heading “non-energy” is 0 for Colas. accepted, vs 28% in 2010. Outside of France, Colas began promoting a specially adapted version of * For Colas, this involves raw materials and construction materials (29% mixes, 21% concrete and 13% other) the software tool in the Indian Ocean zone. Indeed, SEVE® was designed to enable relatively simple translation and database adaptation to di! erent national requirements.

Report of the Board of Directors Colas Group 23 Neophalte BT®, 3E® and 3E®+R warm mix, Ecomat®, ASPHALT MIXES etc. In 2011, the Group’s production of warm mixes Colas’ asphalt mix production included an average and mastic asphalts increased in one year’s time of 12% reclaimed asphalt pavement (RAP) vs 10% in from 6% of total Group production to over 12%. 2010. This represents the recycling of almost 5 mil- Subsidiaries have gone above and beyond their ini- lion tons of aggregates, some 230,000 tons of tial target of doubling production to 11% (consoli- bitumen – the equivalent output of a medium-sized dated level). The greatest proportions of these new refi nery, and the avoidance of 87,000 tons of CO products are produced by the American road com- 2 emissions. There are disparities in recycling perfor- panies (32%) and by Smac (100%). Warm products mance however, from 17% to 22% in Belgium, o! er the dual advantage of 10 to 30% energy sav- Switzerland and the United States, and 9% in ings and 70% to 90% fumes reductions. A target of France (7.2% in 2010), a fi gure which refl ects strong over 50% in 2018 is imaginable. progress (target in France: 12% in 2012). Since it is Vegeroute® products replace petroleum-based estimated that if all available road demolition mate- components with plant-based material and make it rials were recycled, asphalt mixes could contain up possible to reduce manufacturing and application to 20 to 25% RAP, Colas is halfway to achieving the temperatures and even the amount of material theoretical maximum. required. This range includes a fl uxing agent (Vege- fl ux®), binders (V, Vegeclair®), a hot road-marking IN-PLACE RECYCLING product (Ostrea®), an emulsion (Neogreen®) and various mixes, such as Compomac V®. Since these This recycling technique continued to expand in products are carbon sinks, they ensure a positive 2011, accounting for over 8.6 million m| of road construction, vs 7.8 million in 2010, mainly in North CO 2 balance. America, the United Kingdom, West and Central Photovoltaic roofi ng: in 2011, buy-back prices for Africa. This success was made possible by such electricity production have slumped, and a total proven technologies as Valorcol®, Recycold®, etc. In power capacity of 8.8 MWc was installed (18.5 MWc all, the technique was used to recycle the equiva- in 2010). Smac is now focusing on developing lent of a 900-km section of two-lane road. products designed to reduce a building’s energy consumption, in particular with innovative facades. Chemical hazards Recycling Colas has focused its e! orts to reduce chemical hazards in the following priority areas. Recycling is a key focus for development since Colas is a major producer and user of materials. Although Solvents: the use of the following has been discontin- public works is one of the sectors which uses the ued: solvents in laboratories, solvent-based degreas- most heavy materials, the fact that a large propor- ing “fountains” in workshops, and toluene in road tion of these materials can be recycled means that paints. road-building is a major contributor to recycling. Pigments: paint pigments that contain heavy met- This is a key issue for Colas, as well as for its custom- als are no longer used and priority is being given to ers because they can benefi t from more cost-wise non-powder formulations. materials (economic interest is one of the three pil- lars of responsible development). Non-stick products: plant-based alternative products are being used instead of fuel-oil. RECYCLING PLATFORMS Bitumen fumes: please see operational risk section in Risks. Colas is clearly committed to promoting the In 2011, production of recycled products grew 17%, use of warm mixes, which produce almost no fumes while that of Colas quarries and gravel pits only or smoke, and help save energy, too. The percentage increased 9% (1). Some 11 million tons of waste prod- of warm mix use has soared from 6% in 2010 to more ucts (dirt debris, asphalt and mastic asphalt, con- than 12% in 2011, thanks in particular to the United crete demolition rubble, foundry slag, clinker, etc.) States where warm mix now accounts for 30% of were recycled vs 9 million tons in 2010 and 8.7 mil- total asphalt mix production. The initiative has taken lion in 2009). This is the equivalent of 14% of Colas’ hold around the world: North America, South Korea, total production of aggregates (11% in 2010), or the West and central Europe, France (mainland France output of 32 quarries(2). The production of recycled and overseas departments), Gabon, Madagascar, materials is increasing faster than that of ‘new’ Morocco, Mauritius, etc. materials.

(1) Based on integral proportional consolidation, not on “Group share” volumes. (2) Based on average permanent production at Colas of more than 100,000 tons each year.

24 Colas Group Report of the Board of Directors Resins: a reasearch project entitled Greencoat is road renewal and maintenance PFI for Portsmouth, being conducted in collaboration with several part- England, a high energy performance maintenance ners and with the support of the ANR (1) under the contract for street lights and tra$ c lights for the aegis of sustainable development foundation Chem- City of Paris, four MAC maintenance contracts in SuD. the United Kingdom that cover a third of the national motorway system, fi ve similar CMA (5) con- Waste oils: the worldwide objective is to ensure the tracts in Canada (in Alberta and Red Deer County), disposal or recycling of used motor oils, which form and two MAC rail contracts in the UK. the bulk of Colas’ hazardous waste. The global waste oil recovery rate is currently 67% on a consolidated basis (56% in 2010). The optimum ratio is Responsible purchasing estimated at approximately 80%, once stock e! ects Colas works with over 100,000 suppliers and sub- and equipment oil consumption are taken into contractors worldwide which can be classifi ed into account. six main groups: local subcontractors, local materials suppliers, global raw materials suppliers, national and international materials suppliers, national and Dialogue with international service providers and miscellaneous community institutions suppliers. Identifi cation work for each group defi nes the pos- In addition to addressing these strategic and major sible scope of action available and the strategic pri- challenges, Colas continues to closely monitor other orities for responsible purchasing: safety, quality, issues of social interest. monitoring the use of illegal immigrant workers, compliance with payment terms and conditions, Rail-road debate design and correct use of materials, etc. Colas is currently trying out various supplier-rating systems, Colas holds signifi cant shares of both the road and even though rating all suppliers would be impossi- railroad construction markets in France, the UK and ble. A risk assessment is also underway in France to many other countries. This enables it to understand determine the types of purchases that should have the merits of both types of transportation from an priority. objective perspective. Colas also uses alternative transport modes, rail and water, for its own needs, As regards purchasing from developing countries, chalking up over one billion txkm in 2011. Since the issues relating to relocation is very marginal for there are relatively few cases where one mode of Colas due to the nature of the industries involved, transportation tends to replace another, Colas’ but its businesses in these countries respond to objective is to improve the environmental perfor- these challenges(6). mance of each mode, through a policy of technological and methodological innovation aimed to create a balanced approach to transport. Community involvement and project support These actions are essentially local and are man- The total cost of public aged by Colas companies and their operating units. infrastructure They mainly involved sponsoring sports teams Colas advocates a more partner-oriented approach (50%) or cultural events (40%), for a total of 2.5 mil- that takes into account the total cost of infrastruc- lion euros, which has remained unchanged against ture and implements innovative public/private sec- 2010. Outside of France, the proportions vary with tor contracts, such as PPP (2), PFI (3), MAC (4) and 30% for sports, 20% for humanitarian programs, concessions. An infrastructure designed and built 15% for education, and 10% for cultural events, for for the long term, regularly maintained, optimizes an unchanged budget of 1.1 million euros. public investment and reduces the consumption Actions by the parent company in France include a of resources. The following contracts, at various skills-sharing patronage program to restore paths stages of completion or operation, are a good illus- in Versailles park, artistic patronage with the pur- tration of this approach: the Reims tramway and chase of paintings by the Colas Foundation, sup- Highways A 41 and A 63 in France, the M6-M60 port to the international dance company Akram Motorway in Hungary, the Vichy bypass, city streets Khan, and backing for the humanitarian e! orts of in Le Plessis-Robinson, street lighting in Libourne, “On the Road to School” with Good Planet for a total of 1.5 million euros.

(1) National research agency (France). (2) Public-private partnerships. (3) Private ﬁ nance initiatives. (4) Managing Agent Contractors (UK). (5) Contract Maintenance Area (Canada). (6) See “Corporate citizenship actions in developing countries” section.

Report of the Board of Directors Colas Group 25 negoti ation and execution of these contracts. Apart Risks – Exceptional from the generally applicable regulations (antitrust and competition law, criminal law, etc.), most of the events – Disputes contracts awarded by public or private contracting authorities are subject to specifi c regulations, whether Measures to appraise, monitor and mitigate risks on a national or international level. Due to this prolifer- related to the specifi c nature of Colas’ businesses have ation of contracts and the decentralized management for many years been among the Group’s key manage- approach, Colas inevitably runs the risk of non-comment principles, applied at the most suitable level pliance with legal requirements, despite a vast array of to ensure appropriation. The Group’s decentralized upstream preventive measures (information, training organization remains the key to risk management. programs, charter, etc.) and strict downstream penalties intended to deter violations. These risks, which Corporate-level risk assessment as well as the overall may lead to fi nancial penalties (e.g., those imposed by policy with respect to risk are managed mainly on the antitrust authorities), could also entail criminal or civil basis of the feedback received via the Group’s report- liability, result in a loss of market share (by prohibiting ing system or, conversely, the dissemination of best bidding on certain contracts) or be detrimental to the practices. However, the subsidiaries and profi t centers Company’s reputation. The likelihood and potential are responsible for dealing with, controlling and moni- severity of this risk are di$ cult to measure. toring their own risks. The formal listing and analysis of major risks are carried out once per year by the executive operational management teams. The risk Signifi cant legal claims mapping is presented in the form of a categorization as of December 31, 2011 of the main risks a! ecting the achievement of operational, fi nancial and strategic objectives. This analysis • Claims for civil damages: is used to develop action plans designed to mitigate −Hungary. Several claims for damages have been the risks thus identified, supplemented by a risk brought against Hungarian subsidiaries (Egut, prevention policy founded upon monitoring claims Debmut, Alterra), following a decision by Hungary’s and losses, an analysis of the phenomena of causal competition authority. These claims represent a relations, and feedback. Corporate-level coordination total of some 25 million euros. The largest claim, and organization using reporting tools ensure that the which involves Hungary’s national highway com- di! erent types of risk can be identifi ed and analyzed pany, accounts for 19 million euros of this total. In a effectively, help to centralize feedback so that best report submitted on April 22, 2010, a court-appointed practices may be communicated to all subsidiaries, expert concluded that the customer had su! ered no while also contributing to the development of a risk loss. When the customer contested this fi nding, the prevention policy and appropriate preventive actions. expert rea$ rmed his conclusion before the court on Colas’ businesses do not appear to be particularly December 10, 2010. As the national highway company exposed to major or systemic risks, given their nature, remained firm in its position, the court nonetheless the dispersion of Group profi t centers and the number appointed a new construction expert as well as an of contracts performed. In addition to its exposure to accounting expert in September 2011. The next hear- the normal economic and fi nancial conditions of the ing is scheduled for March 2012. various countries in which it is present, Colas’ business −France. An action for damages against the sub- activities depend heavily on public-sector procure- sidiary Colas Île-de-France – Normandie has been ment and any substantial change of this can have a filed by the General Council of the Seine-Maritime large impact on sales and prices. Soaring public debt department. Following the ruling that Colas Île-de- and the sovereign debt crisis that exists in number of France – Normandie and fi ve other companies were countries in which Colas operates (notably in Europe, deemed to have participated in anti-competitive France included) have, of course, increased this risk bidding practices on asphalt mix contracts in the factor. The risk is attenuated by the large share of Seine-Maritime department between March 1991 and Group business done in maintaining infrastructure December 1998, the General Council filed a motion which is vital to the mobility of both people and on February 25, 2010 requesting principally that goods, and hence, to the economy as a whole, by the contracts entered into be voided and that the the good geographic spread of operating units, by a amounts paid be reimbursed, or, alternatively, that the diversity of businesses, and by the Group’s capacity to contracting companies be ordered to pay compensa- bid on complex contracts. tion for the loss su! ered. The total amount claimed from the six companies under the motion’s princi- Legal risk pal claim is 133.7 million euros, while the damages requested under the alternative claim total 35.6 million euros. Colas Île-de-France – Normandie contests Risks relating to the nature these claims. Statements of defense were fi led with of business activities the administrative court in November 2011. Colas’ business activities tend to involve a large number of contracts as well as the decentralized

26 Colas Group Report of the Board of Directors • Provisions are made to cover the risks of adjust- sites are kept under regular surveillance to reduce the ments to payroll taxes that could be claimed by likelihood of this risk and are subject to such require- URSSAF (the French labor inspectorate) subsequent ments as fi re permit procedures and annual infrared to its inspections. These provisions are deemed suf- thermography audits of thermal and electrical equip- fi cient to cover all of the inspections that are regularly ment, in addition to preventive maintenance actions. made at a large number of Colas companies. In late Sites that are larger or more exposed to this risk due 2009, URSSAF made a major adjustment to exemp- to the nature of their operations are subject to specifi c tions in social security contributions allowed under requirements. In addition to regulatory requirements the “TEPA” and “Fillon” laws, and from the very fi rst they are monitored in collaboration with the engineer- euro for the 2006 to 2008 fi scal years, on the grounds ing departments of their insurance companies, which that the required information was not supplied in elec- issue risk prevention recommendations. These sites tronic form, a type of submission deemed mandatory are: by URSSAF in its interpretation of the French Social −subsidiary Axters’ waterproofi ng membrane plant in Security Code. The parent company and its subsidiar- Courchelettes; ies consider that they are in no way subject to lump- sum taxation as provided for under article R. 242-5 of −SRD’s bitumen and refined products plants in the French Social Security Code, as they submitted Dunkirk. the supporting documents necessary for verifi cation Appropriate insurance coverage has been provided in a timely fashion, and since the format in which for all sites. these were supplied enabled them to be used. It is currently difficult to estimate the possible financial Industrial sites relate to compliance with regulations consequences of this adjustment since it is based on governing industrial facilities and quarries in France. the principle that all exemptions under the “TEPA” and Commitments for the rehabilitation of quarries, “Fillon” laws could be rejected on the sole grounds defi ned by government agencies, are an integral part that Colas submitted its substantiating documents of every operating license. The same principle applies in paper rather than electronic form. The amount of in other countries where Colas has similar installa- this adjustment is estimated to be 52.6 million euros. tions. Provisions covering these commitments are Appeals have been submitted to URSSAF’s various recognized in the fi nancial statements. The amounts in conciliation committees, which have yet to deliver question are periodically reviewed and adjusted when any rulings as of this writing (except for the appeal necessary. As of December 31, 2011, total provisions by Colas Île-de-France – Normandie, whose case has covering these commitments amounted to 152 mil- been brought before the social security court). lion euros (133 million euros at end 2010). The Group applies a systematic policy of obtaining environmen- Contract for the A2 Motorway between Cernavodă • tal certifi cation (ISO 14001 for example). Progress is and Constanţa, in Romania: documented and tracked thanks to monitoring and Negotiations with the Romanian government as a certifi cation audits carried out with the assistance of result of di$ culties experienced with the design-build external organizations as well as in-house resources. contract for the section of the A2 Motorway between A global check-list system, deployed three years ago, Cernavodă and Constanţa (20 km for an amount of now covers most materials production activities and 175 million euros) were not able to reach a success- makes it possible to consolidate action plans. At the ful conclusion. On March 28, 2011, Colas sent notice end of 2011, 80% of Colas’ materials plants worldwide of the termination of this contract due to a failure by annual revenue were subject to at least one cer- by the contracting authority to honor its contrac- tification standard or used internal check-lists. This tual obligations. Colas fi led a request for arbitration system was incorporated into the French and interna- with the International Chamber of Commerce on tional internal control system. Commitments to clean December 19, 2011, claiming in particular the payment up SRD’s site when it ceases to operate have been of just over 150 million Romanian leis (just over 35 mil- provisioned in the Company’s accounts and these lion euros) plus interest for the contractual losses amounts are periodically adjusted. su! ered. As permitted under this arbitration proce- Some of these production sites might be responsible dure, the Romanian government might possibly fi le a for accidental pollution (pipe breakage or defective counter-claim. storage installations) despite the fact that the installations are designed and maintained to prevent the Industrial and occurrence of such events (e.g., containment bins). Given the large number of sites and their relatively environmental risk small size, combined with the e! ective management (e.g., at emulsion plants, bituminous membrane plants, of these risks, it is expected that any incident of this quarries, mastic asphalt units, asphalt mixing plants type would be limited in scope and not material at the and bitumen refi neries, etc.) Group level. Fire and explosion: the magnitude of this risk depends Although the production processes of these industrial on a site’s size and the nature of its operations. This installations result in CO 2 emissions, the installations risk is not considered to be signifi cant for most indus- are not subject to emissions quotas (with the excep- trial sites, given their relatively small size. Still these tion of SRD, see below). The situation in the European

Report of the Board of Directors Colas Group 27 Union is however evolving rapidly. All other emissions are regularly monitored by external authorities and in Credit or counterparty risk the context of internal control procedures. Given the large number of clients across a wide network of businesses in road construction, water- Société de la Ra$ nerie de Dunkerque (SRD), which proofi ng and cladding, safety, signaling, tra$ c man- was acquired on June 30, 2010, is a refinery that agement, construction materials, etc. (many private makes refined oil products, bitumen and specialty clients as well as local authorities), the risk of signifi - products obtained by refining petroleum products. cant counterparty risk is low. With respect to the rail It is subject to the regulations that apply to facilities subsidiaries, a substantial portion of business is con- classifi ed as environmentally sensitive and, due to the ducted with state-owned companies or state agen- nature of its products, must also comply with several cies with responsibility for rail infrastructures. In the European directives which include: the Seveso direc- private sector, the preliminary analysis of the client, tive “high threshold”; the Combustion directive, which supplemented through the use, wherever possible, of governs the atmospheric emissions of high-combus- credit insurance, limits this risk. The largest risks can tion plants, and the IPPC directive, which deals with be quantifi ed using statistical analysis in the range of pollution prevention and control. Prefectural authori- several hundred thousand euros. The fi nancial crisis, ties ensure that these requirements are addressed by increasing these risks, has resulted in reinforced when issuing operating permits. Facilities are designed procedures prior to the signing of contracts and the and maintained to prevent or minimize the risk of a launch of construction work. pollution accident or other major incident. Inspection and audit programs are implemented and checked by Colas carries out 92% of its business in Europe and an internal audit department. The French government North America (United States and Canada). Exposure regularly verifies that these programs are effective to country risk is therefore low, as is the risk of non- and observed. Accident scenarios are prepared with payment, since 64% of revenue is generated by pub- government authorities during hazard analyses and lic-sector customers such as national governments emergency response resources and procedures are and local authorities, involving a very large number specified in internal emergency plans. Employees of small-scale projects with a low individual contract manage risks in strict compliance with the operat- value. ing procedures of the safety management system, Business conducted in high-risk countries carrying pursuant to the ISO 14001 standard. This system is low ratings assigned by international organizations presented once a year to the Local Information and or credit insurance fi rms such as Coface is limited to Consultation Committee (CLIC), which consists of contracts whose financing is provided most often representatives of the French government (includ- by multilateral lending institutions (the European ing the sub-prefect), local government authorities, Development Fund, World Bank, etc.). non-profi t organizations and industry. All minor accidents and incidents are recorded and analyzed. Any At the end of 2011, the total amount of overdue receiv- modifi cations are subject to failure mode, e! ects and ables was much lower than at the end of 2010. The criticality analysis (FMECA), a standardized method great majority of these receivables are owed by the for assessing industrial hazards in complex systems. national government and local government entities. Maintenance work is subject to the strict requirements Although customers will be asked to pay unexpected of the safety management system and to the preven- additional fi nancial charges on these late payments, tive maintenance recommendations of insurer engi- these payments do not seem to be at substantial risk neering departments. The plant is shut down every at this time. fi ve years for major servicing and upgrading. Lastly, SRD is regularly inspected by DREAL, the regional environmental, development and housing bureau, Operational risk which is responsible for verifying that procedures Signifi cant steps have been taken with regard to the are complied with. Furthermore, since the facility’s transportation of site machines and industrial equip- production processes emit CO 2, it is subject to emis- ment (reminders of regulations covering oversized sions quotas and its declarations are verified by an loads have been issued, software designed for cal- approved auditing fi rm. culating loads has been rolled out at all subsidiaries, Three other significantly smaller sites are classified each subsidiary has developed its own transport Seveso “low threshold”. The sites in questions are action plan, instructions and procedures for the safe all depots for explosives used in quarries located in transport of site machines have been reissued and Martinique, in Mayotte and in Saint-Martin. reminders of procedures for negotiating contracts for transportation and plant rental have been issued). Outside of the European Union, one can also site the Fire prevention has also been the focus of consider- KBC refi nery in Malaysia (Thai subsidiary Tipco), and able e! orts (especially in the area of waterproofi ng several explosives depots in Africa and in the Indian and cladding) as has explosion prevention in under- Ocean zone. Prevention policies on these sites are ground work on fluid networks carrying dangerous identical to their European counterparts, although the substances such as natural gas. administrative framework di! ers from one country to another. With regard to workplace accidents and tra$ c accidents arising during work-related travel, the Group

28 Colas Group Report of the Board of Directors has implemented a strong, proactive policy of acci- collectively, of its employees working at sites where dent prevention and safety training which has yielded mastic asphalt or asphalt mixes are used for road signifi cant, sustainable improvements. This has led to paving. In October 2011, Colas decided to expand the a steady drop in the frequency rates of both work- reach of the procurement policy relating to fi nishers place and tra$ c accidents (despite the slight increase (asphalt application) it has until now applied only in recorded in 2011). France, with the aim of limiting purchases worldwide Colas regularly monitors occupational health hazards. to equipment including a system for dispelling fumes In particular, the Group has been monitoring exposure at the jobsite (subject to the availability of equipment to bitumen fumes in France and abroad for some with the required dimensions). All paving machines twenty years and is represented on most of the task with capacities larger than 7 metric tons used by forces that deal with this issue. At Colas, this moni- Colas in North America are thus now equipped with toring is coordinated by the Human Resources and ventilation systems. Environment departments, who regularly report to Apart from these e! orts, for several years Colas has senior management. Colas has been working on this reaffirmed its commitment to wider use of warm issue with occupational health authorities and gov- mastic asphalt and asphalt mixes, which allow for sig- ernment agencies for quite some time and regards nifi cant reductions in the application temperatures of this risk as “low and adequately mitigated”, except in confi ned spaces (tunnels) where specifi c risk analysis bitumen-containing products and virtually eliminate is necessary due to the combined effect of vehicle bitumen fumes. Colas regularly reminds public offi- exhaust fumes and ventilation issues. The only unde- cials and contracting authorities of these benefi ts in sirable health effect proven to exist at the Group’s order to encourage more rapid expansion of the use road construction project sites is irritation of the res- of these products. piratory tract and eyes. There does not appear to be a risk of obsolescence On October 19, 2011, the International Agency for associated with patents and technical processes. Research on Cancer (IARC) published a new classi– fi cation of occupational exposures to bitumens and Colas’ research and development policy fosters the bitumen fumes following a scientifi c survey of all avail- continual renewal and modernization of technical able studies worldwide in order to assess the possible expertise. carcinogenic nature of these exposures. Occupational Contract performance risk is relatively limited by the exposures to straight-run bitumens and their emis- large number of contracts and their low average value. sions during road paving were classifi ed as “possibly Some subsidiaries however are involved in particularly carcinogenic to humans” (group 2B). This classifi ca- large contracts that are monitored using specifi c pro- tion indicates that, despite the large number of studies conducted, the IARC was not able to conclude as cedures. These projects are more exposed to various to the existence or non-existence of a probable or potential constraints resulting from their complexity, proven link between the use of bitumens in road pav- design, geological and archeological characteris- ing and cancer. This expression of scientifi c doubt and tics, land availability, construction and lead-times. In prudence stands as an invitation to the scientifi c com- Slovakia, the Colas subsidiary ISK is currently having munity to perform further research, particularly on the di$ culty in performing a fi xed price contract involving possible mechanisms of action at the bio-cellular level. the construction and renovation of a power plant in This decision relied on numerous epidemiological or Mochovce. laboratory studies, none of which were able to provide su$ cient evidence for the carcinogenicity of occupa- Colas’ operations can also be disrupted by various tional exposures during road paving. natural phenomena and most notably unfavorable On the basis of all of these studies, Colas has not weather. Rain, snow and ice can increase construction altered its assessment of the risk of cancer related costs or result in additional fixed costs when work to bitumen fumes, which it continues to evaluate as must be stopped. “low and adequately mitigated” (using the standard administrative terminology) at its jobsites. At this stage, there is little reason to suspect that the Liquidity risk European Union or the United States will decide At December 31, 2011, net available cash and cash to challenge this analysis given the findings of the equivalents totaled 332 million euros, in addition to IARC, but Colas remains attentive to any regulatory 1,400 million euros of confi rmed medium-term bank solutions that may come to light. Colas is keeping a credit lines undrawn at that date. During the year, close eye on this issue in France, with recent lawsuits Colas renewed a program to assign receivables, con- and media campaigns seeking to cast doubt on one fi rmed for 2014 for a total of 300 million euros. Colas of the main materials used in the road construction therefore has no exposure to liquidity risk. industry. Colas continues to measure its employees’ exposure at its project sites and to facilitate the work Colas Group companies’ confirmed bank loan con- of researchers studying this issue. Colas maintains tracts do not contain any signifi cant fi nancial clauses its proactive policy to support innovation so as to likely to lead to their early termination and/or early guarantee the health and safety, both individually and mandatory repayment.

Report of the Board of Directors Colas Group 29 BANK LOANS AND BORROWING MATURITIES

in millions of euros Current Non-current

Less than 1 to 2 2 to 3 3 to 4 4 to 5 5 years Total Total 1 year years years years years and + 2011 2010 2012 2013 2014 2015 2016 2017 and + Bank loans 30 34 19 15 116 214 171 (medium-long-term) Finance leases 9 5 4 4 2 24 25 Other ﬁ nancial debts 1 3 4 4 (long-term) Sub-total 48 40 39 23 19 121 242 200 Short-term borrowings 114 and overdrafts At December 31, 2011 162 40 39 23 19 121 242 200 At December 31, 2010 259 29 23 16 13 119 200 200 Current portion 48 50 of non-current debt

BREAKDOWN OF FINANCIAL DEBT BY CURRENCY

in millions of euros Euro USD (1) GBP (1) Other (1) Total Non-current December 2011 105 21 79 37 242 Current December 2011 24 23 10 105 162 Non-current December 2010 94 2 75 29 200 Current December 2010 91 13 10 145 259

(1) Equivalent in euros.

CONFIRMED/DRAWN CREDIT LINES

Conﬁ rmed credit lines – Maturity Drawn credit lines – Maturity

in millions of euros Less than 1 to 5 Beyond Total Less than 1 to 5 Beyond Total 1 year years 1 year years Credit lines 51 1,501 138 1,690 48 121 121 290 Letters of credit Total 51 1,501 138 1,690 48 121 121 290

BREAKDOWN OF FINANCIAL DEBT BY TYPE OF INTEREST RATE Breakdown of current and non-current ﬁ nancial debt after accounting for all interest rate hedging instruments that have not yet reached maturity as of the balance sheet date, net of outstanding bank overdrafts:

Fixed rate debt (1) : 75% (2010: 44%) Floating rate debt: 25% (2010: 56%)

(1) Loans with rate ﬁ xed for more than one year.

30 Colas Group Report of the Board of Directors INTEREST RATE RISK The table below shows financial assets and debts broken down by fixed and variable interest rate at December 31, 2011.

in millions of euros Variable rate Fixed rate Total Financial assets: – cash and cash equivalents 446 446 Financial liabilities: – borrowings (1) (242) (62) (304) – outstanding bank overdrafts (114) (114) Net position before cash management 90 (62) 28 Interest rate hedges 166 (166) Net position after cash management 256 (228) 28 Seasonality adjustment (2) (734) Position after cash management (478) and seasonality adjustment

(1) Including (13.1) million euros for the fair value of interest rate swap (Aximum and Colas Rail) recognized in other comprehensive income. (2) Activity and cash undergo periodic swings linked to changing seasons. The adjustment makes it possible to obtain a clear picture of the general trend in cash over the year, which is used to calculate the impact of interest rate ﬂ uctuations on ﬁ nancial costs.

Therefore, an instantaneous 1% increase in the short-term interest rate on the net position shown above would increase ﬁ nancial costs by 4.8 million euros over a full year.

Activity linked to SRD, Société de la Raffinerie de Market risks Dunkerque, is more subject to exchange risks because Some of the Group’s companies use fi nancial instru- their activity involves the purchase and sales of prod- ments to reduce the impact that changes in exchange ucts valued in dollars which are then purchased and rates, interest rates and commodity prices may have sold in dollars and/or in euros. The risk is managed via on their earnings. These instruments are used as a currency swap for dollar fl ows. described below. RISK MANAGEMENT FOR INTEREST RATES Nature of the risks for the Group The Group profi t and loss is not very sensitive to interest rate changes. On an average annual basis, the RISK MANAGEMENT FOR FOREIGN share of variable rate debts is equal to available cash EXCHANGE RATES under variable rates – only the seasonal nature of the Group’s business requires short-term borrowings. The level of risk is low because subsidiaries generate only a very small proportion of their revenue from Some fi nancial assets or liabilities can occasionally be export. Revenue from foreign countries is chiefl y gen- hedged. erated by subsidiaries that issue invoices and book their expenses in local currency. RAW MATERIALS RISKS Occasionally, some currency contracts are hedged for Colas can be sensitive to fl uctuations in supply regu- exchange risks. larity and raw material costs, in particular for oil products (bitumen, fuel, heating oil, oils), in road Borrowings and deposits are centralized in the same construction as well as for other raw materials such currency (euro, US dollar, Canadian dollar, etc.). as steel, copper or aluminum in safety and signaling, Generally, Group investments in foreign companies waterproofi ng and railways activities. (subsidiaries, branches, joint ventures) are not hedged The raw materials with the strongest impact on the because these companies are not held to be sold. Group are bitumen and other oil products. Currency swap is mainly used to optimize Group cash by converting – without any foreign exchange risks – excess cash in one currency, lent to subsidiaries in their own local currency to substitute bank lines.

Report of the Board of Directors Colas Group 31 Supply risks Risks linked to SRD Société de la Ra$ nerie de Dunkerque activity Delays or disruption of supplies can generate additional direct and indirect expenses in roads and water- The activity of the Société de la Raffinerie de proofing activities. This risk can first be considered Dunkerque acquired in June 2010 is sensitive to raw as non-systemic, except in the event of conflict and material price fl uctuations. The net income of a spe- full-fl edged disruption of oil supply, which can a! ect cialty products refinery is based on the difference a country or more likely a region for a variable length between the sales price of the products it produces of time. At the beginning of 2011, the KBC refi nery in (oil, para$ n wax, bitumen and fuels) and the price of Malaysia (Thai subsidiary Tipco) had to stop produc- the raw materials processed by the refi nery (atmos- tion due to a disruption in supply of special crude pheric residue fuel, hydrocrackates and feedstocks). at an acceptable price. This is why Colas created a The refi nery profi t margin is linked to the said price Group bitumen management division several years di! erence. The fi rst half-year saw satisfactory profi t ago and bitumen management divisions in some margin, which then slumped during the last quarter major geographical zones (North America), for the due to raw material price increases (heating fuel) purpose of reinforcing supply capacities (quantity and a drop in prices, notably for base oils, due to supply agreements, imports). Colas has also focused September's downward turn in the economic crisis on developing storage capacity in mainland France, and customer destocking. in Europe, in French overseas departments, in the The supply/production/sale cycle is fast and purchase Indian Ocean and, on a larger scale, in North America. contracts are tailor-made to reduce that risk. A com- Storage capacities are large compared to bitumen mitment committee is in charge of raw materials consumption of every region. The Group continues purchasing. The raw materials are purchased in month to implement a policy aiming at increasing storage “A”, used in production in A+1 month, and manufac- capacity whenever possible (acquisition and creation). tured products are sold in A+1 month, A+2 months or The acquisition of SRD, Société de la Raffinerie de A+3 months. A hedging policy to reduce these risks Dunkerque, which produces 300,000 tons of bitumen has been implemented. per year, helps signifi cantly optimize bitumen supply security for the road businesses in mainland France At December 31, 2011, this hedging represented the and Northern Europe. The bitumen risk is increased equivalent of 132,000 barrels of Brent and 1,200 tons when faced with temporary shutdowns or possible of 1% fuel oil sold forward for a notional amount (vol- closures of refineries in mainland France (Berre, ume multiplied by forward) of 12 million euros. The Petit-Couronne). cash fl ow hedge as of December 31, 2011 was valued at (0.1) million euros and will have negligible impact on Risks linked to prices variation Group profi ts and losses. Bitumen prices have been rocked by major purchase price variations over the last several years. Several Group principles and policies factors help limit the risk of these fl uctuations: number of contracts and average contract value, which for fi nancial hedging instruments often allow prices to be taken into consideration in Financial hedging instruments used are conventional the bid, revisions, and indexing clauses in France and instruments such as: elsewhere around the world. Thanks to awareness −forward currency trades, currency swaps, currency drives, Group employees often include price varia- options, according to a hedging policy against foreign tion parameters in contractual negotiations. In some exchange risks; regions, Group companies can sign guaranteed price supply contracts for a given period of time. For major −interest rate swaps, future rate agreements, pur- contracts, when the deal is signed, hedging policies chase of caps and tunnels and rate options, according are underwritten if needed. There is a share of busi- to a hedging policy against interest rate risks; ness remaining involving the sales of manufactured −purchases and sales of futures contracts, raw mate- products to third parties for which bitumen and/or oil rial swaps, raw material options according to a hedg- product price increases are passed on if the competi- ing policy for raw materials. tive environment does so allow. The above instruments are characterized by the fact In light of the above, it is impossible to measure that they are only used for hedging, only undertaken income statement sensitivity given the thousands of with fi rst rank French banks and foreign banks, and contracts performed in a variety of legal environments present no cash risk in the event of turnaround. in terms of protection, and the difference in price increases between geographical areas. The Group follows the use of these instruments, the choice of trade o! , and generally speaking, the expo- Lastly, an indirect risk exists should the price of sure to exchange risks and interest rate risks with these products or services increase for the customer, detailed, specifi c follow-up reporting to the manage- because the latter could reduce the volume of orders. ment of the companies involved.

32 Colas Group Report of the Board of Directors CASH FLOW HEDGE BASIS OF VALUATION OF FINANCIAL ASSETS AND LIABILITIES Cash fl ow hedge consists of hedging cash fl ow arising from hedged instruments or forecast transactions. Financial assets and liabilities are stated at cost or amortized cost. When derivative instruments hedge cash fl ow arising from firm commitments or expected transactions, ACCOUNTING OF FINANCIAL INSTRUMENTS portions of profi t and loss that are determined to be STATED AT FAIR VALUE an e! ective hedge are recognized directly in equity. The Group uses very few fi nancial instruments; deriva- The ineffective portion of the hedging instruments tive fi nancial instruments are stated at fair value. Their is reported immediately in profi t and loss. Other resid- fair value is determined with valuation methods, such ual profi t or loss arising from the hedging instruments as options valuation models and the value in use is also reported immediately in profi t and loss. method (discounted cash flows). These models are based on assumptions regarding market fi gures. FAIR VALUE HEDGE Fair value hedges have the purpose of limiting the ACCOUNTING OF PROFIT AND LOSS exposure to changes in the fair value of a recognized GENERATED BY FINANCIAL INSTRUMENTS asset or liability. Financial assets and liabilities are initially stated at When a derivative fi nancial instrument covers expo- their fair value. Unrealized profi t and losses are rec- sure to changes in the fair value of receivables or ognized according to the nature of the hedged item. debts occur, profi t or loss arising from remeasuring At balance sheet date, interest swap fair value is the the hedging instrument at fair value is recognized amount expected to be received or paid by the Group directly in net profi t and loss. The gain or loss on the to close down transactions. Fair value is measured hedged item attributable to the hedged risk adjusts on the basis of present interest rates and credit risks. the carrying amount of the hedged item and is recog- Fair value of forward currency trades is market value nized directly in net profi t or loss. at balance sheet date, i.e., present value of quotations or forward market rates. Fair value of hedged items, according to the type of risk hedged, corresponds to the carrying amount, translated into euros at the exchange rate prevailing Financial instruments on the balance sheet date. as of December 31, 2011 We present below the total of notional amounts Accounting policies for fi nancial outstanding at December 31, 2011, for each type of fi nancial instrument, with breakdown by maturity for instruments interest transactions, and by currency for currency The Group applies accounting methods as defi ned by trade. IAS 39, i.e.:

CRITERIA FOR RECOGNITION OF FINANCIAL ASSETS OR LIABILITIES Hedging accounting is applied when derivative fi nancial instruments compensate, partially or totally, for fair value or cash flow hedge changes of a hedged item. E! ectiveness of hedges is regularly measured, at least quarterly. Nevertheless, in specific cases (non-significant notional amounts, short-hedging maturities, limited impact on profi ts or losses), fi nancial instruments are voluntarily not recognized as hedging transactions, in order to simplify the Group administrative procedures. In these cases, variations of fair value of hedging instruments are recognized directly in net profi t and loss.

Report of the Board of Directors Colas Group 33 HEDGING OF INTEREST RATE RISKS

Interest rate swap Maturity Total Total in millions of euros 2012 2013 to 2016 Beyond 31/12/2011 31/12/2010 On ﬁ nancial assets ––––– On ﬁ nancial liabilities 30 207 237 150

HEDGING OF FOREIGN EXCHANGE RISKS Group companies only generate a small proportion of their revenue from exports. Revenue from foreign countries is chieﬂ y generated by subsidiaries that issue invoices and book their expenses in local currency. Occasionally, certain contracts denominated in foreign currency are hedged for exchange risks.

in millions of euros HUF (1) AUD (1) USD (1) GBP (1) Other (1) 31/12/2011 31/12/2010 Forward purchases 7 3 – – 10 14 Forward sales – 33 35 13 19 100 75 Currency swaps – – – – – – – Currency options – – – – – – –

(1) Equivalent in euros.

HEDGING OF COMMODITIES RISKS

in millions of euros Brent Fuels 31/12/2011 31/12/2010 Forward purchases – 5 5 – Forward sales 11 1 12 4 Swaps –––– Options – 5 5 –

Forward sales of Brent contracts and fuels correspond to hedging for activity at Société de la Ra$ nerie de Dunkerque.

FAIR VALUE OF HEDGING FINANCIAL In the event of +10% change in the price of raw mate- INSTRUMENTS rials (and respectively –10%), the market value of ﬁ nancial instruments would amount to a hedging loss At December 31, 2011, the net present value of hedg- of (34.0) million euros (respectively a hedging loss of ing instruments amounted to (33) million euros. This (32.6) million euros). amount mainly comprises the net present value of interest rate swaps used to hedge the Group’s debt. These calculations have been performed by an independent service provider, in accordance with market The breakdown of the market value by type of hedg- practices. ing instrument is as follows: −transactions undertaken subject to fair value hedging instruments: (18) million euros; Insurance and risk cover −transactions undertaken subject to cash ﬂ ow hedg- The Group takes care to protect its assets, property ing instruments: (15) million euros; and people against foreseeable losses for which insurance is available, while maintaining its competitive −transactions undertaken for trading purposes: none. edge. The estimated risks are managed at all levels In the event of a +1% change in the interest rate yield of the organization through risk prevention, contrac- curve (or –1%), the market value of hedging instru- tual transfer or insurance. Whether or not a risk is ments would amount to (19.9) million euros (or (47.8) insured depends on its nature and its probability of million euros, respectively). occurrence and loss potential. Insurance is obligatory for major risks. Liability insurance policies protect An average unfavorable change of 1% with respect to against claims by third parties and mainly consist of all other currencies would result in a decrease in the obligatory automotive insurance and policies covering market value of hedging instruments to (34.5) million constructions, products, operations and the ten-year euros.

34 Colas Group Report of the Board of Directors guarantee. Insurance policies covering liability to third parties also cover damage to company assets. The Exceptional events coverage amounts are generally equivalent to the and disputes value of the assets. For work under construction, a specifi c insurance policy is subscribed when there is Group companies are involved in litigation or dis- a contractual obligation. Its long-standing accident putes that form part of the normal course of their prevention poli–cy, which is further reinforced every business. Risks have been assessed and fi nancial pro- year, means that it can work closely in partnership visions made using a method comparable with previ- with insurance companies and renew its insurance ous years, based on experience and analysis by the policies under practically identical conditions to those Group’s legal department and legal advisors. To date, of previous years. to the best of the Company’s knowledge, there are no exceptional events or disputes that could signifi cantly impact the activity, assets, earnings or equity of the Group.

Acquisitions of equity interests

During ﬁ scal year 2011, signiﬁ cant equity stakes (1) were acquired in the following companies:

Company Registered o$ ce % held Gamma Materials Beau Bassin (Mauritius Island) 50% Carrières Lamalou Les Aires (France) 100% Travaux Publics de Concassage Ganges (France) 100% Béziers Béton Villeneuve-lès-Béziers (France) 100% Montpellier Béton Vendargues (France) 100% Lamalou Béton Les Aires (France) 100% Whitmer Holdings Prince George (Canada) 100% Godet Rubécourt-et-Lamécourt (France) 65% Soﬁ ma - Maroc Étanche Casablanca (Morocco) 100% Les Bétons Mont-Carmel Montreal (Canada) 100% Carrières de Carlencas Carlencas-et-Levas (France) 100% Servant Prestations Ganges (France) 100% Les Ateliers des Flandres Hazebrouck (France) 100%

Additional acqusitions of investment stakes were carried out as follows:

Company Registered o$ ce % acquired % held Sami Bitumen Technologies (WA) Pty Fremantle (Australia) 40% 100% Cesta-Varaždin Varaždin (Croatia) 30% 100% Tipco Asphalt Bangkok (Thailand) 1% 32% Aquitaine de Matériaux Enrobés Mérignac (France) 18% 82% Charentaise de Matériaux Enrobés Angoulême (France) 16% 71%

(1) Threshold: investments of over 150,000 euros.

Report of the Board of Directors Colas Group 35 Strategy Strengths

Colas’ strategy for profi table, long-term growth Colas' keys strengths are its: remains unchanged, aiming at meeting the modern network of over 800 works centers and 1,400 world’s need for mobility, urbanization and environ- • materials production sites in some 50 countries mental protection. The cornerstones of this strategy worldwide, some of which are over a century old; have been built upon a drive to support responsible development, via social, societal and environmental • core business of building and maintaining living protection issues, based on the following objectives: environments and transport infrastructures, and roads in particular, including all of their multiple strengthen and expand the network of opera- • aspects and components; tions in France and worldwide, to establish and develop sustainable leadership positions for our • a heritage of collective intelligence, values and traditional business activities in local markets, and passion built up over many years, shared by some spread risk through geographic diversifi cation; 66,000 employees, handed down from generation to generation and enhanced by a dynamic human optimize the integration of industrial processes • resources policy; to secure the procurement of aggregates, bitumen and other vital materials and resources, generate • innovative technologies developed by a vast inter- more added value, improve competitiveness and national technology network consisting of some control the quality of materials and products; 2,000 people who work closely with operating units through the Colas Science and Technology Campus expand our core business – Roads – to include • (CST), the premier private research and develop- closely related and complementary specialty activi- ment center in the road construction industry, and ties that will enhance our o! ering to customers, some fi fty research laboratories and around a hun- develop synergies and enable us to penetrate future dred engineering o$ ces; growth markets, such as the railway sector; integration of upstream production processes to increase participation in complex PPP, conces- • • ensure the procurement and quality of essential sion and systems management projects that lever- materials and supplies, such as aggregates, binders, age the full range of Colas expertise in engineering asphalt mixes, ready-mix concrete, bitumen, impervi- (specifi cations, design, construction and mainte- ous membranes and road safety equipment; nance) and project fi nancing; a decentralized network of over 800 work cent- enhance service to customers by conducting • • ers units and 1,400 materials production sites, with large projects that are consistent with the Group’s strong local roots and capable of responding rap- traditional activities; idly to market needs; develop an expanded and innovative o! ering of • a full-service transport infrastructure o& ering products and services capable of meeting sustain- • covering the range of large and small construction able development requirements. or maintenance projects, thanks to the Group’s extensive presence in local markets and its ability to leverage its global expertise and resources.

36 Colas Group Report of the Board of Directors Outlook

Colas has started out 2012 with improved competitiveness, as illus- trated by the increase in proﬁ tability in 2011 despite relatively sluggish markets.

Work-on-hand at the end of December 2011 totaled 6.5 billion euros, up 5% from the end of 2010 (4% in mainland France and 7% for the international and overseas units). The level of work-on- hand allows the Group to move smoothly into the beginning of the year. With the award of preferred bidder status to a consortium including Colas Rail and Colas Midi-Méditerranée on the Nîmes- Montpellier railway bypass PPP contract, 2012 has gotten o! to a good start.

However, market trends for Colas’ businesses remain di$ cult to forecast. France is seeing a number of major projects in the making or being launched, and other projects are well underway involving public transport, urban development, maintenance on road and rail infrastructures, PPPs, and more. However, uncertainty still reigns as to their fi nalization, which will depend on the ability of local authorities to obtain fi nancing. Colas companies in North America, boosted by good fi gures in 2011, should continue to enjoy upbeat business trends in Canada and a resistant market in the United States, along with a recovery – albeit slight – of the US economy. In Europe, outlook for business remains stable in the west and more uncertain in central Europe, where the Group is still targeting fi gures close to the breakeven point, after a major decrease in losses for 2011 vs 2010. In Africa and in the Indian Ocean zone, business should be stable or slightly growth oriented. Asia and Australia will continue to operate in a dynamic environment.

Against this backdrop, Colas is moving into the year with caution. The profi t margin over volume strategy implemented by Colas will remain unchanged. Backed by confi dence in its ability to adapt, Colas boasts a great number of strong suits – in particular a wide sweeping geographic spread and a solid fi nancial situation. On the basis of all available information, the initial revenue forecast for 2012 is 12.5 billion euros.

Report of the Board of Directors Colas Group 37 Colas’ earnings Compensation and appropriation of Company o$ cers of earnings Chairman and Chief Executive O$ cer Total gross compensation (including benefi ts in kind The Statutory Auditors of the Company will present but excluding variable compensation) paid by the their assessments on the financial statements that Bouygues Group and rebilled to Colas in respect of his you are invited to approve in the Auditors’ Report. The duties as a Group senior executive in 2011 to Mr. Hervé fi nancial statements have also been reviewed by the Le Bouc, Chairman and Chief Executive Officer, Works Committee, as required by law. amounted to 924,100 euros (924,100 euros in 2010). Gross variable compensation for 2011 established in The parent company earned a profit of relation to qualitative and quantitative targets to be 324,626,714.03 euros, compared to 267,456,301.95 euros paid in 2012 will be 1,380,000 euros (compensation of in 2010. The total amount available for appropriation, 650,716 euros was paid in 2011 on the basis of 2010). consisting of the net profit for the year plus unap- Mr. Hervé Le Bouc also received 20,000 euros in propriated retained earnings from the prior year, is Directors’ fees paid by Colas in 2011 and 25,000 euros 772,782,383.39 euros. We propose appropriating this in Directors’ fees as a member of the Board of amount as follows: Directors of Bouygues SA, the parent company of • legal reserve: 4,456.35 euros; Colas as defi ned under article L. 233-16 of the French • dividend distribution Code of Commerce. Mr. Hervé Le Bouc benefi ts from for a total of: 237,071,662.74 euros, a supplementary pension plan as a member of the as of May 2, 2012; General Management Committee of Bouygues, which • balance of unappropriated represents 0.92% of yearly compensation per year retained earnings: 535,706,264.30 euros. of seniority in the said plan, subject to a maximum of eight times the annual social security ceiling. This For shareholders who pay income tax in France, the supplementary pension plan has not been posted as a dividend of 7.26 euros per share with a par value of provision since this plan consists of an insurance con- 1.50 euros is eligible for a 40% tax rebate as stipulated tract subscribed with an external organization and is in article 243 bis of the French Tax Code. The follow- governed by the procedure for regulated agreements. ing dividends were paid over the last three fi scal years: • for 2008, 8.75 euros; Directors with employee status • for 2009, 6.75 euros; Total gross compensation (including benefits in • for 2010: 6.30 euros. kind but excluding variable compensation) paid We propose paying this dividend in the form of cash by the subsidiary ColasCanada Inc., a subsidiary with date of payment as of May 2, 2012. of the Colas parent company, in 2011 to Mr. Louis Gabanna in his salaried status as Managing Director of Colas North America was 552,000 Canadian dollars Information on payment (535,000 Canadian dollars in 2010). Gross variable compensation for 2011, based on growth in Group deadlines earnings and qualitative targets, to be paid by the Pursuant to the requirements enacted by the French Company in 2012 will be 690,000 Canadian dollars law on the modernization of the economy (dated (compensation of 620,000 Canadian dollars was paid August 4, 2008, known as LME) and its enforce- in 2011 on the basis of 2010). Mr. Louis Gabanna also ment decree no. 2008-1492 dated December 30, received 20,000 euros in Director’s fees in 2011 from 2008, the total amount of supplier payables on Colas. December 31, 2011 was 44,951 thousand euros (1) by Total gross compensation (including benefi ts in kind due date at closing as indicated hereunder. but excluding variable compensation) paid by the

in thousands Company in 2011 to Mr. Thierry Genestar, in his salaried of euros status as Managing Director of Roads France, was Year Payable Payable Payable 419,470.70 euros (408,163 euros in 2010). Gross vari- after after after 1 month 2 months 3 months Total able compensation for 2011, based on growth in Group earnings and qualitative targets, to be paid by the 2009 27,165 831 28 28,024 Company in 2012 will be 350,000 euros (compensa- 2010 24,610 637 3 25,250 tion of 230,000 euros was paid in 2011 on the basis 2011 44,009 926 16 44,951 of 2010). Mr. Thierry Genestar also received 20,000 (1) International units not included. euros in Directors’ fees in 2011 from Colas.

38 Colas Group Report of the Board of Directors Total gross compensation (including benefi ts in kind but excluding variable compensation) paid by the Share capital Company in 2011 to Mr. Jacques Leost, in his salaried status as Managing Director, International (excluding the Americas) was 703,962.33 euros (287,205 euros Share capital in 2011 in 2010 for fi ve months). Gross variable compensation for 2011, based on growth in Group earnings and quali- As of January 1, 2011, the Company had issued tative targets, to be paid by the Company in 2012 will share capital of 48,937,185 euros, consisting of be 400,000 euros (compensation of 350,000 euros 32,624,790 shares with a par value of 1.50 euros each. was paid in 2011 on the basis of 2010). After adding 29,709 newly issued shares subscribed Total gross compensation (including benefi ts in kind through the exercise of the option for payment but excluding variable compensation) paid by the in shares of the dividend for fiscal year 2010, the Company in 2011 to Mr. Thierry Montouché, in his sala- Company’s share capital as of December 31, 2011 was ried status as General Secretary, was 403,635.83 euros 48,981,748.50 euros, consisting of 32,654,499 shares (392,328 euros in 2010). Gross variable compensation with a par value of 1.50 euros. for 2011, based on growth in Group earnings and qualitative targets, to be paid by the Company in 2012 will Share ownership be 260,000 euros (compensation of 212,000 euros was paid in 2011 on the basis of 2010). Mr. Thierry On the basis of recorded share capital as of January Montouché also received 20,000 euros in Directors’ 2, 2012, Bouygues SA directly and indirectly held fees in 2011 from Colas. 96.55% of Colas’ share capital as of December 31, 2011; Colas Group employees via the “Colas en actions” and Total gross compensation (including benefits in “Colas shares” investment funds held 0.94%. kind but excluding variable compensation) paid by the Company in 2011 to Mr. Christian de Pins, in his As of December 31, 2011, Colas did not hold any treas- salaried status as Managing Director responsible ury stock. for specialized activities and Northern Europe, was 394,695.16 euros (385,131 euros in 2010). Gross variable compensation for 2011, based on growth in Group Share price earnings and qualitative targets, to be paid by the and trading volume Company in 2012 will be 280,000 euros (compensation of 230,000 euros was paid in 2011 on the basis of In 2011, Colas’ share price on the Euronext Paris stock 2010). Mr. Christian de Pins also received 20,000 euros exchange varied from a high of 169.00 euros (April 8, in Directors’ fees in 2011 from Colas. 2011) to a low of 98.50 euros (December 28, 2011) and ended the year at 103.00 euros, i.e., 28.94% lower than Directors whose compensation is paid by the share price as of December 31, 2010. For purposes of comparison, during this period the French CAC 40 Bouygues SA, Colas’ parent company as defined stock market index fell 16.95% and the French SBF 120 under article L. 233-16 of the French Code of stock market index fell 16.21%. Commerce, namely Messrs François Bertière (1) , Olivier Bouygues (1) , Jean-François Guillemin (1) , Philippe Marien (1) (representative of Bouygues SA), Jean- Claude Tostivin (1) , and Gilles Zancanaro (1) : please see the Bouygues 2011 Registration Document for further information.

(1) These six Directors received an amount of 20,000 euros each in 2011 in Directors’ fees from Colas.

Other Directors Directors’ fees paid by the Company in 2011 to Mr. Christian Balmes amounted to 20,000 euros.

Report of the Board of Directors Colas Group 39 Colas share price

Year Month Share price Number of Share capital shares traded in millions of euros

Highest Lowest 2008 January 309.50 205.01 119,370 25.7 February 238.01 208.00 70,970 15.6 March 238.90 218.00 10,779 2.4 April 257.00 220.00 13,644 3.2 May 244.90 226.42 17,439 4.0 June 235.00 196.00 32,434 6.8 July 213.18 181.00 10,661 2.1 August 204.99 190.01 4,146 0.8 September 204.00 145.00 10,947 1.9 October 175.10 129.80 54,331 7.5 November 154.35 125.00 12,342 1.7 December 142.00 121.15 16,611 2.2 2009 January 154.96 130.11 10,728 1.5 February 141.50 124.45 8,258 1.1 March 154.54 125.20 10,829 1.5 April 179.89 135.54 23,296 3.8 May 180.01 153.12 9,191 1.5 June 180.00 166.10 12,360 2.1 July 174.24 159.00 9,660 1.6 August 182.00 168.01 9,184 1.6 September 189.00 177.01 17,593 3.2 October 197.41 180.00 13,138 2.5 November 198.78 176.00 8,478 1.6 December 185.00 171.00 42,859 7.5 2010 January 186.40 174.03 4,455 0.8 February 181.77 174.00 9,270 1.6 March 192.40 172.50 16,489 3.0 April 194.00 174.36 28,625 5.3 May 181.98 163.29 15,620 2.7 June 174.50 158.55 20,343 3.4 July 177.00 159.00 15,296 5.5 August 176.50 159.00 11,748 2.0 September 166.99 144.00 17,703 2.7 October 150.00 135.00 18,872 2.7 November 148.00 128.25 34,276 5.2 December 151.00 132.00 30,218 4.3 2011 January 166.00 141.04 39,583 6.1 February 164.00 147.70 17,864 2.8 March 162.10 147.10 19,406 3.0 April 169.00 154.00 36,301 6.0 May 161.00 153.60 7,817 1.2 June 159.00 147.50 10,774 1.6 July 150.50 142.00 6,838 1.0 August 146.60 120.00 21,700 2.8 September 129.99 100.00 12,602 1.5 October 113.10 105.00 15,124 1.6 November 109.99 100.00 16,751 1.7 December 108.50 98.50 16,493 1.7

40 Colas Group Report of the Board of Directors Share subscription options Options granted to the 10 non-corporate o$ cer employees who received the most stock Pursuant to articles L. 225-184 and L. 225-180, point II options in fi scal year 2011 of the French Code of Commerce, this report informs the Shareholders’ Meeting of the transactions per- Name Granting Grant date Number of Exercise Number of Exercise company options price options price formed by virtue of these authorizations and pursuant (in euros) (in euros) to articles L. 225-177 to L. 225-186 of the French Code Prior to public share After public share of Commerce. buyback program buyback program Tournier Bouygues 14/06/2011 15,000 31.84 15,195 31.43 Philippe (parent Options granted by the Company company) or by companies controlled Ausseil " " 9,000 " 9,117 " by or a$ liated with the Company Georges Da-Poïan " " 8,000 " 8,104 " OPTIONS GRANTED BY THE COMPANY Christophe In 2011, the Company did not grant any options to Lavedrine " " 7,500 " 7,598 " subscribe for new Colas shares within the framework Christian of the authorization granted to the Board of Directors Brossard " " 7,500 " " " to set up a share subscription option plan specifi cally Jean-Pierre for the senior executives and other employees of the Decarnin " " 7,500 " " " Company and of certain of its affiliates, which had Philippe been renewed by the Extraordinary Shareholders’ Ducroix " " 7,500 " " " Meeting of April 16, 2008 in its thirteenth resolution. Daniel Guénolé " " 7,500 " " " OPTIONS GRANTED BY COMPANIES Patrick CONTROLLED BY OR AFFILIATED WITH Roussel " " 7,500 " " " THE COMPANY Frédéric Bouygues granted 514 employees of Colas and its Dusserre " " 6,500 " 6,585 " subsidiaries 887,850 options to subscribe to new Jérôme Bouygues shares, pursuant to article L. 225-180 of Le Roch’ " " 6,500 " " " the French Code of Commerce. The exercise price of Thierry these options is 31.84 euros and they may be exer- Total 90,000 91,174 cised for a period of seven years and six months as Corporate officers and employees of the Company of their grant date (June 14, 2011). Options may be did not receive any other options in 2011 granted exercised on the conclusion of the fourth year follow- by the Company’s affiliates, under the conditions ing the grant date, i.e., with e! ect from June 14, 2015. specified in article L. 225-180 of the French Code of Commerce or by companies controlled by the Options granted to corporate o$ cers Company, as understood under article L. 233-16 of the and Directors with employee status French Code of Commerce. in fi scal year 2011

Name Granting Grant date Number of Exercise Number of Exercise Options exercised by company options price options price (in euros) (in euros) the Company’s corporate o$ cers Prior to public share After public share and other employees buyback program buyback program Le Bouc Bouygues 14/06/2011 97,000 31.84 98,257 31.43 COMPANY SHARE OPTIONS EXERCISED Hervé (parent BY THE COMPANY’S CORPORATE OFFICERS company) AND OTHER EMPLOYEES Genestar " " 15,000 " 15,195 " Options exercised by the Company’s corporate o$ – Thierry cers and employees: none. Leost Jacques " " " " " " There were no options to subscribe to shares issued Montouché """""" Thierry by Colas in existence on December 31, 2011. Gabanna Louis " " " " " " de Pins """""" Christian Total 172,000 174,232

Report of the Board of Directors Colas Group 41 OPTIONS EXERCISED TO PURCHASE SHARES OF AFFILIATE COMPANIES BY COMPANY OFFICERS AND EMPLOYEES

Options exercised by the Company’s corporate o$ cers and Directors with employee status in ﬁ scal year 2011

Name Granting company Grant date Number of options Exercise price (in euros) Genestar Thierry Bouygues (parent company) 15/03/2004 9,416 25.15 Total 9,416

Options exercised by the 10 non-corporate o$ cer employees of the Company that exercised the most options during ﬁ scal year 2011

Name Granting company Grant date Number of options Exercise price (in euros) Guy Christophe Bouygues (parent company) 15/03/2004 5,885 25.15 Lavedrine Christian " " 2,500 " Brissonneau Philippe " " 2,354 " Derdaele Yvo """" Fleischmann Peter " " " " Pastor Jacques " " 2,120 " Aumont Paul-Henri " " 1,413 " Beaulieu Patrick " " 1,177 " Benier Jean-Luc """" Binda Alain """" Total 31,927

42 Colas Group Report of the Board of Directors Special report on the share The characteristics of the program are as follows: −objectives: retirement of all shares bought back repurchase program to ensure, if needed, the cash flow requirements of funds held by Group employees as part of a Company Programs to buy back and retire Savings Plan, in compliance with applicable laws and regulations; shares in 2011 −methods used: buyback of shares sold by the FCP Pursuant to article L. 225-209 of the French Code of investment fund owned by Group employees in the Commerce, the Combined Annual and Extraordinary framework of a Company Savings Plan, to ensure Shareholders’ Meeting of April 15, 2011, in its four- the cash flow requirements of the said plan. As of teenth resolution, renewed the authorization granted December 31, 2011, these funds owned 307,608 Colas to the Board to buy back shares in the Company up shares; to a maximum of 10% of share capital, for a period of eighteen months. This authorization was not used by −maximum number of shares: 307,608 shares, i.e., your Company in the course of ﬁ scal year 2011. 0.94% of the existing share capital; −maximum share price: 200 euros; Program to buy back shares in 2012 −maximum amount paid by the Company: 61,521,600 euros based on the maximum share price; DESCRIPTION OF PROGRAM AND REQUEST FOR AUTHORIZATION FROM THE −ﬁ nancing: Colas reserves the right to use its avail- COMBINED ANNUAL AND EXTRAORDINARY able cash or short- to medium-term debt if additional SHAREHOLDERS’ MEETING OF APRIL 17, 2012 needs exceed available cash from operations; Pursuant to the general regulations governing the −schedule: eighteen months as of the date of AMF (Autorité des Marchés Financiers) in articles 241-1 authorization granted by the Combined Annual and et seq. , we submit for your approval a resolution Extraordinary Shareholders’ Meeting on April 17, 2012, to renew this authorization, for a further period of i.e., until October 17, 2013. eighteen months, to enable the Board to conduct transactions in shares of the Company, pursuant to article L. 225-209 of the French Code of Commerce, up to a maximum of 10% of the total number of shares, while not exceeding the limit allowed under article L. 225-210 of the French Code of Commerce. If granted, this authorization would replace that previously granted by the Combined Annual and Extraordinary Shareholders’ Meeting of April 15, 2011 in its fourteenth resolution.

Synopsis of authorizations as of December 31, 2011

Authorization Maximum amount ASM or ESM Duration Issuance of shares reserved for employees without preferential 10% of share capital 15/04/2011 26 months subscription rights (Resolution 19) Issuance of shares or securities of any type with or without preferential 10 million euros 15/04/2011 26 months subscription rights (Resolutions 17, 18 and 19) Buyback by the Company of treasury shares (Resolution 14) 10% of share capital 15/04/2011 18 months Cancelation of treasury shares by the Company (Resolution 16) 10% of share capital 15/04/2011 18 months Issuance of bonds or similar securities (Resolution 13) 750 million euros 14/04/2010 26 months

Report of the Board of Directors Colas Group 43 Resolutions

We submit the following resolutions for your approval. Ordinary portion of the Combined Shareholders’ Meeting You are requested to approve the fi nancial statements of Colas as of December 31, 2011, grant full discharge to the Directors for their management, approve the consolidated fi nancial statements, the appropriation of earnings, which amount to 324,626,714.03 euros with the payment of a dividend of 7.26 euros per share as of May 2, 2012 and agreements and transactions specifi ed in articles L. 225-38 et seq. of the French Code of Commerce (1 st , 2 nd , 3 rd and 4 th resolutions). You are invited to: • reappoint four Directors for a term of two years to expire at the Annual Shareholders’ Meeting convened to approve the fi nancial statements for fi scal year 2013 (5 th to 8 th resolutions); • authorize the Board of Directors in accordance with articles L. 225-209 et seq. of the French Code of Commerce to purchase the Company’s shares, to a maximum of 10% of the total number of shares constituting the share capital on the date of purchase with the objective of canceling all of the shares bought back in compliance and of ensuring the cash fl ow requirements of the funds held by employees as part of the Company Savings Plan, with Regulation (EC) no. 2273/2003 applicable as of October 13, 2004. This authorization, which will replace that granted by the Annual Shareholders’ Meeting of April 15, 2011, is sought for a period of eighteen months (9 th resolution); • grant powers to carry out all legal requirements (10 th resolution).

44 Colas Group Report of the Board of Directors EXTRAORDINARY PORTION OF THE COMBINED SHAREHOLDERS’ MEETING Resolutions

Extraordinary portion of the Combined Shareholders’ Meeting You are requested to empower the Board of Directors: • to reduce the Company’s share capital by canceling treasury shares, in one or several operations, up to a maximum of 10% of the share capital per twenty-four-month period. This resolution is only to be voted upon if the resolution presented in ordinary business authorizing the Board of Directors to purchase Company shares is approved, in accordance with article L. 225-209, paragraph 4 of the French Code of Commerce and for a period of eighteen months (11 th resolution); • to issue securities conferring entitlement to debt instruments other than the bonds provided for in article L. 228-40 of the French Code of Commerce (12 th resolution); • You are requested to grant powers to carry out all legal requirements (13 th resolution). We invite you to approve the above resolutions. The Board of Directors

Report of the Board of Directors Colas Group 45 Special report by the Chairman of the Board of Directors on the conditions governing the preparation and organization of the work of the Board and on internal control procedures implemented by the Company (articles L. 225-37 and L. 225-68 of the French Code of Commerce)

To the Shareholders, Pursuant to the provisions of articles L. 225-37 and L. 225-68 of the French Code of Commerce, I hereby present my report on the conditions governing the preparation and organization of the work of the Board and on internal control procedures implemented by your Company. This report was prepared on the basis of information received from all corporate departments. It was drafted by the General Secretary and the Chairman and CEO of Colas, was submitted to the Audit Committee and subsequently approved by the Board of Directors in its meeting of February 27, 2012.

PROPOSED CHANGES IN BOARD MEMBERSHIP The Board of Directors SUBMITTED TO THE SHAREHOLDERS’ MEETING A proposal will be submitted to the Shareholders’ Overview of the organization Meeting of April 17, 2012 recommending that the of the Board of Directors Meeting reappoint four Directors for a further term of two years: Messrs Louis Gabanna, Jean-François MEMBERSHIP Guillemin, Jean-Claude Tostivin and Gilles Zancanaro. As of its meeting of February 27, 2012, your Board con- The Board of Directors would henceforth be com- sisted of the following 14 Directors: posed of 13 Directors.

Hervé Le Bouc APPLICATION OF EQUAL MALE-FEMALE REPRESENTATION PRINCIPLE Christian Balmes François Bertière In application of French law dated January 27, 2011 that requires equal male-female representation within Olivier Bouygues the Board of Directors, the members of the Board, Louis Gabanna in compliance with the said law and with the Afep- Thierry Genestar Medef code revised on April 2010, appointed Ms. Jean-François Guillemin Colette Lewiner to be a member of the Board during a meeting on March 18, 2011. As of this date, the Board Jacques Leost has one female Director, i.e., 6% female representation. Colette Lewiner Over the next few years, the Board will appoint more Philippe Marien, permanent female Directors, in compliance with the recommen- representative of Bouygues SA dations of the Afep-Medef Code and French law. Thierry Montouché MEETINGS Christian de Pins Jean-Claude Tostivin The Board of Directors meets fi ve times each year to transact ordinary business (specifi cally, in the months Gilles Zancanaro of February, May, August, November and December). These Directors are appointed by the Shareholders’ In February, the Board approves the fi nancial state- Meeting for a term of two years. ments for the previous fiscal year and reviews the Group’s strategic priorities for each business segment. CHANGES IN THE MEMBERSHIP OF THE BOARD In August, it reviews Group performance during the IN 2011 fi rst half of the year and analyzes business activity and The Shareholders’ Meeting held on April 15, 2011 profi t forecasts for the current year. In both May and reappointed seven Directors, Messrs Hervé Le Bouc, November, it reviews key business indicators as well as Christian Balmes, François Bertière, Olivier Bouygues, the Group’s interim results for the fi rst and third quar- Thierry Genestar, Thierry Montouché and Bouygues ters, respectively. At the December meeting, it reviews SA, and appointed two Directors, Ms. Colette Lewiner the three-year business plan. The agenda of meetings and Mr. Jacques Leost. of the Board called to transact ordinary business is generally divided into three parts: current business activity and outlook; review of fi nancial statements; and legal issues. A set of documents dealing with these matters is presented to each Director.

46 Colas Group Report of the Board of Directors CHAIRMAN AND CEO Committee, examined the fi nancial statements them- selves, set the amount of the dividend as well as its The Board of Directors has decided not to separate payment terms and conditions, and validated the the roles of Chairman and CEO. prospectus for the share buyback program. In particular, the Board introduced the option to receive the AUDIT, COMPENSATION AND ETHICS COMMITTEES dividend in the form of shares, to submit a proposal to the Shareholders’ Meeting for the appointment of The Board is assisted in the performance of its duties seven new Directors and renewed Hervé Le Bouc as by an Audit Committee, a Compensation Committee President and Chief Executive O$ cer. The Board also and an Ethics Committee. The responsibilities of these examined the Group’s business activity and results committees and their operating guidelines are defi ned for 2010, the performance of each of its business seg- in the Board’s internal rules and regulations. ments, the Group’s strategies and outlook for 2011, its work-on-hand, its industrial potential and future strat- Created in February 2003, the Audit Committee egies, the year’s investments, the investment budget meets four times each year to review the consolidated for fi scal year 2011 and evaluated the success of safety and parent company fi nancial statements in advance improvement initiatives. The parent company and of Board of Directors’ meetings. The members of consolidated fi nancial statements were approved with the Audit Committee are Messrs Philippe Marien the proposed appropriation of earnings, as well as the (Chairman), Christian Balmes, Thierry Montouché and compensation awarded to the Chairman, the amount Gilles Zancanaro. and allocation of Directors’ fees under the authoriza- Its mission is to assist the Board in guaranteeing the tion granted by the Shareholders’ Meeting, and the accuracy, reliability and fair presentation of these Combined Shareholders’ Meeting was convened. The statements and the quality of the information com- Chairman’s special report on conditions governing the municated, in particular to shareholders. It reviews preparation and organization of the work of the Board the interim and annual financial statements as well and on internal control procedures implemented by as the internal fi nancial results for the periods ending the Company was approved. A risk mapping covering March 31 and September 30. It ensures the relevance the entire scope of the Group’s operations was pre- of accounting policies and principles, evaluates the sented to the Board. main financial risks, assesses internal control sys- On March 18, 2011, the Board met to submit a pro- tems in place, and issues recommendations. Lastly, it • posal to the Shareholders’ Meeting for the appoint- determines criteria for the appointment of Statutory ment of one additional Director. Auditors and is notifi ed of their mission schedules as well as their recommendations. • On May 16, 2011, the Board reviewed the interim results of the parent company and its subsidiaries for Created on April 17, 1991, the Compensation the fi rst quarter 2011 and two external growth projects Committee is responsible for recommending to the involving the acquisition of stakes. Board the compensation and benefi ts to be received by the Chairman and Chief Executive Officer. The • On July 5, 2011, Board examined and approved the current members of this committee are Messrs Jean- issue of a parent company guarantee as part of an François Guillemin and Olivier Bouygues. international bid. Created on November 25, 2009, the Ethics • On August 29, 2011, the Board reviewed the results Committee is comprised of three Directors (Messrs of the parent company and its subsidiaries for the fi rst Christian Balmes, Jean-François Guillemin and Thierry half of the year, considered work-on-hand in detail Montouché) and is responsible for reviewing all alerts and discussed the current status of investments and or circumstances that might expose the Group to approved the interim statements closed on June 30, risks, as well as all sponsoring contracts in amounts 2011. greater than 20,000 euros. • On September 12, 2011, the Board examined and approved the issue of temporary guarantees in the Activity report of the Board of framework of A63 Highway concession project. Directors for the fi scal year ended • On October 12, 2011, the Board examined and December 31, 2011 approved a real estate asset transfer project. The Board met nine times over the course of the 2011 • On November 14, 2011, the Board reviewed the fiscal year (of which four via conference calls). The Group’s business activity during the third quarter of average attendance rate at Board of Directors’ meet- 2011 and the interim statements for the period ending ings was 93% (excluding conference calls). September 30, 2011. The main items on the agenda of these nine Board • On December 15, 2011, the Board reviewed the meetings were as follows. three-year business plan for the period 2012-2014 (outlook and operational action plans). • On February 28, 2011, the Board approved the annual and interim financial statements after having reviewed the reports submitted by the Audit

Report of the Board of Directors Colas Group 47 Operations of the Committees As with any internal control system, the Company is established by the Board not able to fully guarantee that the risks it is designed to prevent are completely eliminated. AUDIT COMMITTEE Reference framework The Audit Committee met four times during the year, on February 22, May 11, August 25 and November 9, The Colas Group applies the internal control reference 2011. The attendance rate at these meetings was 94%. framework published by the AMF in January 2007. During its meetings, the Audit Committee notably reviewed the Group’s accounting policies, the scope of Scope of application of internal control consolidation and segment information. In February, The Group’s internal control procedures apply to Colas the Committee reviewed major projects, receivables, and to all directly controlled subsidiaries in which the disputes and litigation, and the findings of impair- parent company holds an ownership interest greater ment tests. Updated risk mapping was presented, than 50% (including the subsidiaries of these entities). along with the internal audit program for 2011. In May, several major projects were reviewed, along with a synopsis of in-house audit programs at Colas Rail. A Organization and monitoring presentation of governance and IT organization in the Group was provided by the Chief Information O$ cer. of internal control procedures In August, the Committee examined an updated ORGANIZATION OF THE GROUP progress report on several major projects, receiva- AND INTERNAL CONTROL PROCEDURES bles, disputes and litigation. The Statutory Auditors presented their audit approach for 2011 and conclu- Organization principles sions of the internal audit in two French subsidiaries and one international subsidiary were studied. • Business activities pursued by subsidiaries: virtually In November, two major international projects were all of the Group’s business activities are conducted by reviewed. The internal audit plan 2012 was presented subsidiaries, a very large majority of which are wholly along with the findings from audits performed in a owned by Colas parent company. road subsidiary in mainland France. • High level of decentralization, in order to situate At these four meetings, the Audit Committee issued decision-making processes at the most relevant and an unqualified opinion with regard to the financial effective level: this organization involves a limited statements and recommended that they be approved number of hierarchical tiers and usually only three by the Board. main levels of responsibility. Each manager fulfi lls his or her role by virtue of delegations of powers of attor- COMPENSATION COMMITTEE ney granted to operational and functional managers at di! erent hierarchical levels, which are exercised in The Compensation Committee met in February 2011 the context of general directives. to review the compensation awarded to Hervé Le Bouc, Chairman and Chief Executive Officer, and • Financial and economic responsibility assumed make its recommendations. by independent legal entities (coextensive legal and fi nancial scope of action). Internal control procedures • Systematic and frequent verifi cation of actions and results in relation to objectives defi ned and monitored within the Company in documents drafted at regular intervals on the basis Colas, as the head company of a group of 67 compa- of shared and identical management principles, guide- nies based in some 50 countries, implements internal lines and procedures followed by all Group companies control procedures in line with its business strategies and employees. to ensure the best possible supervision of its opera- • Integrated management tools facilitating the moni- tions and the associated risks, whether oper–ational, toring and supervision of production activities through fi nancial or legal. The objective is to ensure that the the use of software modules covering all manage- accounting and fi nancial information presents a fair ment and accounting functions, supplemented by view of the Group’s business activities and to make a specifi c tool used for reporting and consolidation. sure that management decisions, transactions car- The software tool deployed across all French road ried out and courses of action pursued by employees construction subsidiaries offers complete coverage comply with regulations as well as the guiding princi- of operations, from business acquisition to execu- ples and best practices to which Colas adheres. Risk tion, including budgeting and procurement. This tool management has always been a key priority at Colas, interfaces with the manufacturing tools and the pro- espoused by its senior executives and managers who duction equipment. It is intended to promote greater base their actions on principles and procedures that e$ ciency and simpler control of operations in profi t have been in use for a very long time. centers. Accounting, finance and human resources information systems are currently being harmonized. A single software system has been operational in

48 Colas Group Report of the Board of Directors mainland France since January 1, 2005. The numbers Staff at the subsidiaries have access to the “Group of software tools used for these needs in the Group’s Management Principles” document , a booklet first international operations has gradually been narrowed published in 2001 covering the essential rules and down to a small handful of solutions (one in the procedures applicable within the Group, all of which United States, one in Canada, one in Europe, and one refl ect the values defi ning the Colas spirit and culture, for both the overseas departments and territories and as well as rules of conduct and a code of business eth- Africa). ics developed by Bouygues, the parent company of Colas, to which Colas and its subsidiaries unreservedly Organization of business activities subscribe. Both in France and worldwide, business activities are In the context of this organization, all executive man- performed by work centers or industrial units operat- agement sta! place special emphasis on ensuring that ing in a geographically defi ned region (e.g., a specifi c internal control remains a key priority for employees region of France), each of which is under the super– of companies within the Group (at both long-existing vision of an operational manager supported by his or and newly integrated subsidiaries). The strategy pur- her management teams, who aim to achieve specifi c sued by the Group for many years is one focusing on financial and qualitative objectives. These centers growth and expansion achieved through the applica- are united under either regional subsidiaries (within tion of prudence, rigor and control. The transparency France) or national subsidiaries (outside France). Each of internal control contributes to compliance with of these subsidiaries has its own executive manage- these principles. The sharing of these principles is ment team – in general, a president supported by backed by the skills and expertise of employees, a functional managers responsible for orienting, devel- large proportion of whom have been working within oping and auditing all operations of the subsidiary. the Group for many years, encouraged by a system based on regular internal promotion, or who have In 2011, four Managing Directors steered, supervised joined the Group as a result of the many acquisi- and audited the work of these subsidiaries, grouped tions carried out and who share these values, already as follows: road construction subsidiaries in mainland respected within the entities in question or acquired France, specialized activities (Railways, Waterproofi ng, once they were integrated within the Group. Road Safety and Signaling, Pipelines) and Northern Europe, North America, and the Rest of the World Anticipating requirements and skills and the develop- (French overseas departments and territories, central ment of talents are priority objectives of the Group’s Europe, Indian Ocean, Africa, Asia, Middle East). human resources policy, as is a policy for protecting the life, health and safety of employees. This organization has been modifi ed as of January 1, 2012 and now includes three General Management Supervision and control of operations Departments, as follows: Work-on-hand, revenue and profit in a highly −Roads in mainland France, Waterproofi ng; • decentralized Group −North America; The nature of the road construction business, as −International (excluding the Americas), Safety and well as the other specialized activities pursued Signaling, Pipelines. by Colas, means that the Group receives orders for, executes and recognizes in its accounts about The Rail sector reports directly to the Chairman and 110,000 construction projects each year. In addition CEO. to the thousands of small-scale projects of relatively short duration, Colas regularly handles a number Main internal control procedures of major projects in France and especially abroad. All subsidiaries and managing directors benefi t from Engineering studies and order management are under assistance provided by the functional departments the responsibility of the operating managers in charge of Colas, which provide the benefi t of their expertise of some 800 works centers and 1,400 production (procurement, internal audit, accounting and con- sites throughout the world. Bids for either large-scale solidation, communication, environment, fi nance, legal projects or those considered as exceptional in relation matters, marketing, equipment, research and devel- to their characteristics or complexity, as well as pro- opment, human resources and information systems). jects in new markets for the Group (these elements These departments defi ne and make changes to the are defi ned in detail in the internal procedures and/or Group’s guidelines and procedures in their specific delegations of powers of attorney) as well as bids for areas of expertise. They work closely with the func- long-term operations such as service contracts (con- tional managers of the subsidiaries. Meetings bring cessions, public-private partnerships, private fi nance together at least once or several times each year initiatives) are subject to prior approval by a contract all managers within the Group for a single business committee at the subsidiary level, by the Managing line so as to share experiences, organize and dis- Director with responsibility for the geographic area, or seminate information, and keep abreast of the latest by the General Management of Colas. In 2011, execu- developments. tive contract committees met 63 times to review the conditions for submitting bids. Dedicated IT tools are used to follow-up performance on the projects. The

Report of the Board of Directors Colas Group 49 validity of these arrangements is verifi ed by the exec- of subsidiaries, executive management teams and on utive management functions of the Group’s various the Group level. The training plan, which will continue subsidiaries. Contracts resulting in revenue in excess through next year, has been determined. of 20 million euros at the conclusion of work are moni- Procedures with regard to preparing, process- tored on a half-year basis by the Audit Committee. • ing and monitoring financial and accounting • Acquisitions and disposals information As any acquisition process exposes the Group to risk, The main documents, procedures and tools used all proposals for the creation, acquisition or disposal for the communication of accounting and financial of an undertaking (securities or assets) or of property information are based on accrual accounting. This assets must fi rst be presented in the form of a spe- allows for monitoring worksite cost schedules, as well cifi c investment or disinvestment request, including a as for preparing activity reports by subsidiary and/ set of supporting documents defi ned in the guide to or country and monthly statements of post-tax profi t internal procedures. These proposals are submitted (monthly for subsidiaries and the Group), which are to the Executive Management of the Group and are consolidated. They give the revenue, the order intake, subject to its approval prior to being presented to the the main financial indicators and the consolidated Board of Directors of the subsidiary carrying out the net profit of the Group, on the 15 th of each month acquisition. following the month of operations. These fi gures are compared monthly with the bi-annual budgets and Objectives and action plans in the area of sustain- • the quarterly balance sheets and income statements, able development are monitored on a regular basis, at the level of each subsidiary and each executive particularly in relation to: management team. The net consolidated cash fl ow −health and safety: safety in the workplace and dur- position is prepared on a daily basis for companies ing employee transportation is a priority for every located in mainland France and on a monthly basis Group company. A control, monitoring and report- for the Group. These fi gures are reconciled with the ing system analyzing these indicators has been three-month forecasts, which are produced each developed; month. Meetings are organized throughout the year with the main senior executives in charge of operating −environment: compliance with environmental regu- the subsidiaries, to analyze changes in business activ- lations is regularly verifi ed. ISO certifi cation in quality ity, the economic situation, strategy and issues relating and environmental management is in the process to current a! airs. of being obtained across the Group, with the aim of achieving certification for all industrial installations. The Accounting and Consolidation department is in Analysis systems (worldwide check-lists) have been charge of preparing and analyzing the consolidated implemented and give rise to shared action plans. An fi nancial and accounting information. The division sets Environment department at the Colas parent com- out and monitors the accounting rules and policies pany works through a network of representatives in in accordance with IFRS. For the 2011 fi nancial state- all subsidiaries. It enforces the guidelines laid down by ments, 548 consolidation reporting packages were executive management granting subsidiaries broad processed for a scope of consolidation covering autonomy to best adapt these measures to address 633 entities. Personnel involved included some 15 sta! specifi c local issues; at Colas, about 200 at the headquarters of subsidiaries based in mainland France, 450 in operating entities −ethics: for many years, guidelines have been estab- and, outside France, some 150 sta! in headquarters lished and disseminated to promote compliance with and 300 in operating entities or at worksites, giving a business ethics and standards of integrity, which have total of more than 1,100 persons. been included in a brochure and summarized on the first page of the management principles brochure, In France and abroad, cash management is central- supplemented by a code of ethics. Given the con- ized whenever possible. Financial fl ows in mainland siderable decentralization of business lines and the France and abroad are subject to Group procedures, very large number of sta! members in a position to to ensure maximum security and to minimize fraud enter into contracts, particularly with public sector risks. clients, risks associated with business ethics cannot be Procedure for the coverage of risks through ruled out completely. It is for this reason that training • insurance programs and refresher courses are o! ered, together with the implementation of controls and reporting, the Risk management policy focuses on people, pro- ultimate goal being to ensure coverage of all subsidi- duction and transport assets, work sites and manu- aries. In 2011, training e! orts were tripled compared factured products. These risks are identified and to 2010, with ten full-day training sessions dedicated analyzed based on prior experience where possible. to ethics and legal liability of managers (update The primary focus is placed on prevention in order to of knowledge and comprehensive training) in five reduce the frequency and impact of incidents. One regional subsidiaries in France and three international aspect of the policy, which is important in Colas’ fi eld units in Hungary, Slovakia and the Czech Republic. In of work, is to treat both road and railroad worksites all, over 400 employees received this special training. on a fractional basis. The Group consistently commu- In addition, regular reminders are given in all meetings nicates any lessons learned from previous incidents

50 Colas Group Report of the Board of Directors to all levels within the Company and across all busi- updated each year when the three-year business plan ness segments. Risks are monitored by functional is produced. departments, particularly the legal department, of The annual self-evaluation of the principles of Colas’ each subsidiary, under the authority of its president. internal control framework, tested for the fi rst time in These risks are systematically identifi ed on a basis of France in October 2008, has now been extended to data updated in real time by subsidiaries. Colas’ risk all Colas business segments. There are 529 principles, and insurance department supervises and contributes comprised of 253 general principles and 218 account- its expertise, as and when required, to the manage- ing and fi nancial principles, to which have been added ment of these risks. The assessed risks are managed 58 principles specific to the Group’s business lines. at all levels by the prevention, legal transfer of risk, the Together they form Colas’ internal control framework. conservation of risk or risk insurance. Insurance cover is required for all major risks. Transfer to insurance is • An assessment was performed in October 2011 in conditional upon the defi nition and assessment of risk each French regional subsidiary and each country (probability of occurrence of the damage). The insur- subsidiary outside France (except in the United ability of risk remains subject to the constraints of the States and Canada, the assessment was performed insurance market. Certain risks are insured by Group at the state or province level), thus a total of policies managed by Colas on the basis of the infor- 65 subsidiaries or companies, representing 99.4% mation of the subsidiaries. Others may be covered on of the Group’s consolidated revenue. an optional basis under existing policies (subsidiar- The review of the proper application of these ies are responsible for subscribing to such policies). • principles at the various subsidiaries takes the form Finally, internationally, certain insurance policies are of a self-evaluation, with each principle assigned a subscribed locally, either to meet local legislation, or score of between 1 and 4, depending on the extent to cover frequency risks necessitating local-level man- of application of the principle at the subsidiary agement. Liability insurance policies cover third party and the official procedures employed to ensure property and bodily injury claims and mainly include proper application. Each assessment provided by mandatory automobile insurance as well as general a respondent best able to appreciate the extent public liability, products liability, and premises and of application of a given principle in the subsidiary operations liability insurance, together with contrac- is then validated and commented by a validator, tor’s ten-year guarantee insurance. Coverage amounts generally the manager of the entity or another are appropriate to the risks incurred by Group com- individual delegated to perform this role. panies and are generally in excess of 5 million euros. Property damage insurance covers damage a! ecting • The assessment of the proper application of the assets included in the companies’ asset base. The Colas internal control framework involved the par- guarantee amounts are generally equivalent to the ticipation of presidents and CEOs as well as opera- value of the assets. For work under construction a tional, technical, equipment, human resources, specifi c insurance policy is subscribed when there is a legal, IT, administrative and financial managers, contractual obligation. accountants, the functional division heads at the Colas parent company and the managing directors. MONITORING AND SUPERVISION OF THE SYSTEM • For this third global assessment, the subsidiaries were requested to base their evaluation more In 2011, Colas pursued its e! orts focusing on constant on the operating units’ assessments. 100 of the improvements and the continuous adaptation of its 529 principles that make up Colas’ internal control internal control procedures. framework were thereby assessed at the level of entities; their assessments then contributing to Progress in the development of internal control the subsidiary respondents’ project and validators’ procedures fi nal assessments. The Group’s project for the defi nition of internal con- • A score of 1 or 2, indicating a lack of application trol procedures was launched in September 2007, in or, more frequently, a partial or insu$ ciently pro- close collaboration with Bouygues, its parent com- cedural application of a given principle, results in pany. Conceived as a three-year plan, this project an observation with recommendations concerning sought to identify and review the existing internal con- action plans to be implemented locally or in a gen- trol procedures and to implement any changes and eralized fashion depending on the analysis. improvements required to obtain an internal control The analysis of the results of this second overall system encompassing all Colas Group companies. This • assessment of internal control principles found that: project uses input from exchanges with other functions within the Bouygues Group, addressing cross- −in general, a large majority of subsidiaries demon- functional issues in a harmonized manner, while taking strate good overall management of operations and into account the specifi c characteristics of Colas. processes, and, for each process, the defi nition and gradual appropriation by those involved is seen, as is This process for improving Colas’ internal control correct application of Group management principles; procedures consists of an annual self-evaluation of the principles of the procedures and a manage- −overall, progress was made, as shown in the 2011 ment of risks based on mapping the risks, which is self-evaluations, where the average rating was higher

Report of the Board of Directors Colas Group 51 than that of the previous year (the good rating of charter, a real-time test simulating an overall IT shut- accounting and fi nancial policies contributed to this). down in two profi t centers in France; This improvement seems to be related to; • two meetings of the Management Committee work- • action plans rolled out following fi rst two self-evalu- ing on cross-disciplinary paths for improvements; ation campaigns, • launching of a newsletter and an analysis of pay- • specifi c action plan implemented for the Caribbean ment procedures throughout the Group to improve and French Guiana regional division that led to protection against payment fraud, in the wake of a improved control of operations; growing number of cases of attempted fraud, none of −points requiring attention: which were successful in 2011.

• improvement in managing and coordinating For 2012, the actions planned include: employees’ career via career committees, identifying crucial posts and monitoring employees with high • an anonymous employee satisfaction poll in potential (roll-out remains incomplete in some zones), April 2012 for all employees; • organization of annual performance reviews for • three human resources managers for the inter- office staff, supervisors, managers (improvement national divisions will be appointed, one for central required in some international zones), Europe, one for Northern Europe and one for the • control of links between employees authorized to Indian Ocean zone. order and suppliers (improvement needed in some In addition, local action plans included, for example, works centers), improved formalization of organization and powers of • improvement in securing computer equipment attorney, training programs in favor of business eth- rooms, ics, roll-out of career committees where these did not • greater caution in small business units and partner- exist, the creation of internal audit divisions, ongoing ships where separation of powers is often di$ cult to optimization of purchasing, implementation of share enforce; accounting software.

−the 2011 fiscal year saw the exposure of certain RISK MAPPING weaknesses: The program to map risks and their associated action • insufficient reactivity in some business units in plans was updated by the General Management divi- mainland France to adapt to slumps in their business sions per zone and per line of business. An overview is market, presented to the Board of Directors at its meeting to • failure to accurately calculate revenue in two profi t be held in February and to the Audit Committee at its centers in mainland France, meeting held prior to that of the Board of Directors. • several cases of fraud (insignifi cant amounts on a The mapping confirmed that Colas’ exposure to Group level) in Great Britain, United States, Indonesia, systemic risks is relatively limited but it showed the mainland France for which partial recovery was Group’s sensitivity to risks connected to economic obtained, and fi nancial situations of the countries in which Colas • unpaid invoices left by private customers, carries out business and the extent and/or speed at • discrepancies in fi nancial assessment of stock (insig- which its local entities are able to anticipate and adapt nifi cant on consolidated level), to such risks. • di$ culties integrating after external growth. Monitoring of internal control Main actions taken in 2011 following the 2010 assessment: procedures All participants in internal control across the Group reinforcing management of resources, to bet- • are responsible for the monitoring and management ter know and anticipate needs in terms of skills and of its procedures. The process is supervised by a expertise, confirm potentially available employees coordinator at the level of the Colas parent company, who are apt for promotion and mobility, in particular who liaises with a network of correspondents in the for job positions that have been identified as cru- Group’s country- or region-based subsidiaries. cial (980 managers were contacted directly by the Human Resources department during the fi rst half- As part of its program, the Group’s internal audit year to fi nd out their expectations and mobility); team verifi es that the internal control principles have been properly applied and audits the quality of the poll carried out amongst 1,109 managers to identify • assessment. existing Group values and to understand which of these need to be more widely promoted; The Group’s internal audit team consists of eight auditors working under an audit manager, who reports improving safety on IT systems with wide spread • directly to the General Secretary as of January 1, 2012. distribution of the global IT safety policy, an IT user

52 Colas Group Report of the Board of Directors The responsibilities of internal audit mainly relate to: so that they may use these fi ndings in the context of their usual procedures in relation to accounting and the assessment of the organizational approaches • fi nancial matters. These fi ndings will also be used to deployed at the subsidiaries and other audited entities guide the work of the internal audit team in conjunc- for the management of risks, the protection of assets, tion with that carried out by the Statutory Auditors. the reliability of fi nancial statements and disclosures The Statutory Auditors are also informed of the as well as compliance with the rules, procedures and general fi ndings of the self-evaluation of accounting objectives of the Group and with applicable laws and and financial principles carried out by the French regulations; subsidiaries. proposals for improvements in the operations of • The objective of current internal controls is to allow the audited entity to enhance its effectiveness and Colas to achieve profitable growth in a harmonious ensure the adequate dissemination of best practices. manner. It is therefore rooted in the prevention and The scope of the internal audit team’s responsibilities control of risks arising from operations or any other includes the verifi cation of the application of internal type of risk. As its primary objective, it aims to ensure control principles on the basis of the Colas framework, the reliability of accounting and fi nancial reports and the results of the annual self-evaluations and the provide a true and fair image of Colas to its sharehold- implementation of action plans intended to improve ers, customers and employees. the entire internal control system. E! orts to improve and modernize this internal control The annual program for the internal audit function framework have been and will continue to be carried is approved by the Chairman. This program includes out. However, internal controls may not represent an about 10 audits on average relating to entities based absolute guarantee and constant vigilance is required in France and those of the Group’s international in this respect. operations. Entities having recently joined the Group and those whose most recent audit dates back more The Chairman than five years are the main targets of the annual audit program. Accordingly, in 2011, the team audited the subsidiaries Colas Rail (Great Britain), Colas CZ (Czech Republic), GTR and LRM (Morocco) as well as the track, freight, tramway and engineering activities at Colas Rail in France, the road companies Screg Île-de-France – Normandie, Colas Nord-Picardie, Screg Nord-Picardie and the Échangeur Nord-Picardie head o$ ce and the Roy quarry company. These audits may be supplemented by more technical or targeted engagements. Each of these audits results in an audit report submitted to the Chairman, to the functional division heads at the Colas headquarters, to the executive management team of the country or region concerned, as well as the management bodies of the audited entity. Each time, a copy of this report is also sent to the Group’s Statutory Auditors. The internal audit team also receives the reports drafted by the Statutory Auditors of Group companies. Each audit summary report is supplemented by a list of recommendations for the attention of the audited entity’s management bodies so that the entity may draw up an action plan within the subsequent two months. The Statutory Auditors are informed of the annual internal audit program. Regular meetings between internal and external auditors are planned so as to exchange information on the work performed by each team and verify the complementarity of the procedures applied. The internal control framework, in its most recent version, is forwarded to the Statutory Auditors. The summary of the fi ndings of the self-evaluation procedure in 2011 was submitted to the Group’s Audit Committee and discussed in its meeting of February 22, 2012. This summary is made available to the Statutory Auditors

Report of the Board of Directors Colas Group 53 Report of the Statutory Auditors

prepared in accordance with article L.225-235 of the French Code of Commerce on the report of the Chairman of the Board of Directors

(Fiscal year ended December 31, 2011)

To the Shareholders , These procedures consist mainly in:

In our capacity as Statutory Auditors of Colas and −obtaining an understanding of the internal control in accordance with article L. 225-235 of the French procedures relating to the preparation and processing Code of Commerce, we hereby report to you on the of the accounting and fi nancial information on which report prepared by the Chairman of your Company in the information presented in the Chairman’s report is accordance with article L. 225-37 of the French Code based and of the existing documentation; of Commerce for the year ended December 31, 2011. −obtaining an understanding of the work involved in It is the Chairman’s responsibility to prepare and to the preparation of this information and of the existing submit for the Board of Directors’ approval a report documentation; on internal control and risk management procedures implemented by the Company and to provide the −determining if any material weaknesses in the inter- other information required by article L. 225-37 of the nal control procedures relating to the preparation and French Code of Commerce relating to matters such as processing of the accounting and fi nancial information corporate governance. that we would have noted in the course of our work Our role is to: are properly disclosed in the Chairman’s report. On the basis of our work, we have nothing to report −report on the information contained in the on the information in respect of the Company’s inter- Chairman’s report in respect of the internal control nal control procedures relating to the preparation and procedures relating to the preparation and processing processing of the accounting and fi nancial information of the accounting and fi nancial information, and contained in the report prepared by the Chairman −confirm that the report also includes the other of the Board of Directors in accordance with article information required by article L. 225-37 of the French L. 225-37 of the French Code of Commerce. Code of Commerce. It should be noted that our role is not to verify the fairness of this other information. OTHER INFORMATION We conducted our work in accordance with profes- We confirm that the report of the Chairman of the sional standards applicable in France. Board of Directors also contains the other information required by article L. 225-37 of the French Code of INFORMATION ON THE INTERNAL Commerce. CONTROL PROCEDURES RELATING TO THE PREPARATION AND PROCESSING OF Paris-La Défense and Courbevoie, February 27, 2012 ACCOUNTING AND FINANCIAL INFORMATION. The Statutory Auditors The professional standards require that we perform KPMG Audit MAZARS the necessary procedures to assess the fairness of A division of KPMG SA the information provided in the Chairman’s report in respect of the internal control procedures relating to Xavier Fournet Gilles Rainaut Gaël Lamant the preparation and processing of the accounting and Partner Partner Partner fi nancial information.

54 Colas Group Report of the Statutory Auditors Notes to the report of the Board of Directors

Directorships and positions held by Company o$ cers (article L. 225-102-1 of the French Code of Commerce)

Name of company Type O$ ce in the company Head o$ ce

Hervé Le Bouc Colas SA Director, 7, place René-Clair Chairman and Chief Executive O$ cer 92100 Boulogne-Billancourt – France Bouygues SA Director 32, avenue Hoche 75008 Paris – France Bouygues Immobilier SA Director 3, boulevard Gallieni 92130 Issy-les-Moulineaux – France Coﬁ route SA Permanent representative of Colas 6/10, rue Troyon 92310 Sèvres – France Colas Inc. Inc. Director 163 Madison Avenue, suite 500 NJ 07960 Morristown – United States ColasCanada Inc. Director 4984 place de la Savane, Bureau 150 Montreal, Quebec H4P 2M9 – Canada Colasie SA Director, 7, place René-Clair Chairman and Chief Executive O$ cer 92100 Boulogne-Billancourt – France Colas Midi-Méditerranée SA Permanent representative of Colas 345, rue Louis-de-Broglie – La Duranne 13792 Aix-en-Provence – France Aximum SA Permanent representative of Colas 41, boulevard de la République (up to July 2011) 78400 Chatou – France Aximum SA Permanent representative of IPF 41, boulevard de la République 78400 Chatou – France Échangeur International SNC Permanent representative of Colas 7, place René-Clair 92100 Boulogne-Billancourt – France Fondation Colas FDT Chairman 7, place René-Clair 92100 Boulogne-Billancourt – France Hincol Ltd Director 5 H Floor Richardson – Crudas Build Sir JJ Road BY 400008 Mumbai – India Isco Ltd Director Je-il bldg 94/49 Youngdeungpo – dong 7 ga Yougdeundpo – dong 140988 Seoul Republic of Korea Sacer Atlantique SA Permanent representative of Spar Échangeur Nantes – BP 90783 2, rue Gaspard-Coriolis – 44307 Nantes – France Screg Est SA Permanent representative of Colas 44, boulevard de la Mothe 54000 Nancy – France Société Parisienne SA Permanent representative of Colas 2/4, allée Latécoère d’Études, d’Informatique 78140 Vélizy-Villacoublay – France et de Gestion Spac SA Permanent representative of IPF 13, rue Madame-de-Sanzillon 92112 Clichy – France Tipco Asphalt (Tasco) SA Director Tipco, 118/1 Rama 6 road – Samsen Nai, Phayathai – 10400 Bangkok – Thailand Colas Émulsions SACS Representative of Colas on the Board 5, boulevard Abdellah-Ben-Yacine of Trustees 21700 Casablanca – Morocco Grands Travaux Routiers SACS Representative of Colas on the Board 5, boulevard Abdellah-Ben-Yacine of Trustees 21700 Casablanca – Morocco La Route Marocaine SACS Member of the Board of Trustees 5, boulevard Abdellah-Ben-Yacine 21700 Casablanca – Morocco Société Maghrébienne SACS Member of the Board of Trustees 5, boulevard Abdellah-Ben-Yacine d’Entreprises et de 21700 Casablanca – Morocco Travaux

Notes to the report of the Board of Directors Colas Group 55 Name of company Type O$ ce in the company Head o$ ce

Christian Balmes Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Apsys SA Director ZAC de la Clef-Saint-Pierre 1, boulevard Jean-Moulin 78990 Élancourt – France

François Bertière Bouygues SA Director 32, avenue Hoche 75008 Paris – France Bouygues Immobilier SA Director, 3, boulevard Gallieni Chairman and Chief Executive O$ cer 92130 Issy-les-Moulineaux – France Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France

Olivier Bouygues Bouygues SA Permanent representative of SCDM, 32, avenue Hoche Deputy Managing Director 75008 Paris – France SCDM SAS Managing Director 32, avenue Hoche 75008 Paris – France Bouygues Telecom SA Director 32, avenue Hoche 75008 Paris – France Télévision Française 1 (TF1) SA Director 1, quai du Point-du-Jour 92100 Boulogne-Billancourt – France Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Bouygues Construction SA Director 1, avenue Eugène-Freyssinet 78065 Guyancourt – France Alstom SA Director 3, avenue André-Malraux 92300 Levallois-Perret – France Eurosport SA Director 3, rue Gaston-et-René-Caudron 92798 Issy-les-Moulineaux – France Finagestion SA Director 1, avenue Eugène-Freyssinet 78280 Guyancourt – France SCDM Énergie SAS Permanent representative of SCDM, 32, avenue Hoche Chairman 75008 Paris – France Sagri-E SAS Chairman 32, avenue Hoche 75008 Paris – France Sagri-F SAS Chairman 32, avenue Hoche 75008 Paris – France Sénégalaise des Eaux SA Director Centre du Hann – Route du Front-de-Terre BP 224 – Dakar – Senegal SIR SNC Non-associate Manager 32, avenue Hoche 75008 Paris – France SIB SNC Non-associate Manager 32, avenue Hoche 75008 Paris – France Société de Distribution SA Director 1, avenue Christiani d’Eau de la Côte d'Ivoire Abidjan – Ivory Coast (Sodeci) Compagnie Ivoirienne SA Director BP 6923 d’Électricité (CIE) Abidjan – Ivory Coast Seci SA Director, 34, avenue Houdaille – Tour Sidam BP 4039 Chairman and Chief Executive O$ cer Abidjan – Ivory Coast

56 Colas Group Notes to the report of the Board of Directors Name of company Type O$ ce in the company Head o$ ce

Louis R. Gabanna Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Colas Inc. Inc. Director, 163 Madison Avenue, suite 500 Chairman of the Board NJ 07960 Morristown – United States ColasCanada Inc. Director, 4984 place de la Savane, bureau 150 Chairman of the Board Montreal, Quebec H4P 2M9 – Canada Chairman and Chief Executive O$ cer Canadian Road Builders Inc. Director Suite 1560, Weber Centre – 5555 Calgary Trail Edmonton, Alberta T6H 5P9 – Canada DGOC Ltd Director, 4984 place de la Savane, bureau 150 Chairman of the Board Montreal, Quebec H4P 2M9 – Canada Sintra Inc. Director, 4984 place de la Savane, bureau 200 Chairman of the Board Montreal, Quebec H4P 2M9 – Canada Terus Construction Ltd Director 201-5550 152 Street – Surrey, British Columbia V3S 5J9 – Canada Interoute Construction Ltd Director 1056 Playmor Road – Box 22 – Crescent Valley, British Columbia V0G 1H0 – Canada L B Paving Ltd Director 2992 Tatlow Road – Box 3513 – Smithers, British Columbia V0J 2N0 – Canada North Coast Road Ltd Director 201-5550 152 Street – Surrey, British Columbia Maintenance V3S 5J9 – Canada Skookum Asphalt Ltd Director #1 Ear Lake Road – Withehorse, Yukon Y1A 6L4 – Canada YCS Holdings Ltd Director 4955 Sandberg – Road Box 2370 – Prince George, British Columbia V2N 2S6 – Canada Works Alberta Ltd Director, Suite 1560, Weber Centre – 5555 Calgary Trail Chairman of the Board Edmonton, Alberta T6H 5P9 – Canada 251145 Alberta Ltd Director County Industrial Park – Box 608 Grande Prairie, Alberta T8V 3A8 – Canada 373247 Alberta Ltd Director County Industrial Park – Box 608 Grande Prairie, Alberta T8V 3A8 – Canada 400319 Alberta Ltd Director County Industrial Park – Box 608 Grande Prairie, Alberta T8V 3A8 – Canada 1278368 Alberta Ltd Director Suite 1560, Weber Centre – 5555 Calgary Trail Edmonton, Alberta T6H 5P9 – Canada G & C Asphalt Ltd Director 10015 Thatcher Avenue – North Battleford, Saskatchewan S9A 3W8 – Canada Alberta Highway Services Ltd Director 23 Bellerose Drive – St. Albert, Alberta T8N 5E1 – Canada Arctic Holdings Ltd Director 135 Kam Lake Road – Box 2949 And Leasing Yellowknife, NT XIA 2R2 – Canada E Construction Ltd Director 10130-21 Street NW – Edmonton, Alberta T6P 1W7 – Canada NPA Ltd Director County Industrial Park – Box 608 Grande Prairie, Alberta T8V 3A8 – Canada NWT Construction Ltd Director 135 Kam Lake Road – Box 2949 Yellowknife, NT XIA 2R2 – Canada Standard General Inc. Director 23 Bellerose Drive – St. Albert, Alberta T8N 5E1 – Canada Standard General Ltd Director 23 Bellerose Drive – St. Albert, Alberta Construction (1996) T8N 5E1 – Canada Synergy Construction Ltd Director Suite 1560, Weber Centre – 5555 Calgary Trail Materials Edmonton, Alberta T6H 5P9 – Canada Wood Bu! alo Project Ltd Director 10130-21 Street NW – Edmonton, Alberta Management T6P 1W7 – Canada Emulsion Products Inc. Director, 2200, 10155 – 102 Street – Edmonton, Alberta of Canada Chairman, T5J 4G8 – Canada Secretary, Treasurer

Notes to the report of the Board of Directors Colas Group 57 Name of company Type O$ ce in the company Head o$ ce

Thierry Genestar Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Adelac SAS Director Le Châble – 400, route de Viry 74160 Beaumont – France Atlandes SAS Director 15, avenue Léonard-de-Vinci 33600 Pessac – France Beaujolaise de Porphyre SA President Échangeur Lyon – 2, avenue Tony-Garnier (up to October 2011) 69007 Lyon – France Carrières Roy SA Director Le Noubleau – BP 1 79330 Saint-Varent – France Colas Belgium SA Permanent representative of Colas 313, rue Nestor-Martin 1082 Brussels – Belgium Colas Centre-Ouest SA Permanent representative of Colas Échangeur Nantes – 2, rue Gaspard-Coriolis 44300 Nantes – France Colas Île-de-France – SA Permanent representative of Colas 2, rue Jean-Mermoz – BP 31 Normandie 78771 Magny-les-Hameaux – France Colas Environnement SAS Director 7, place René-Clair 92100 Boulogne-Billancourt – France Colas Est SA Permanent representative of Colas 44, boulevard de la Mothe 54000 Nancy – France Colas Nord-Picardie SA Permanent representative of Colas Échangeur Lille – 197, rue du 8-Mai-1945 BP 10135 – 59653 Villeneuve-d'Ascq Cedex – France Colas Rhône-Alpes SA Permanent representative of Colas Échangeur Lyon – 2, avenue Tony-Garnier Auvergne 69007 Lyon – France Colas Sud-Ouest SA Permanent representative of Colas Échangeur Sud-Ouest – 6, avenue Charles-Lindbergh 33700 Mérignac – France Développement SAS President Échangeur Lyon – 2, avenue Tony-Garnier Infrastructures (up to October 2011) 69007 Lyon – France Perrier TP SA Director 13, route de Lyon 69800 Saint-Priest – France Revue Générale SAS Director 10, rue Clément-Marot Routes et Aérodromes 75008 Paris – France Sacer Atlantique SA Permanent representative of Colas Échangeur Nantes – 2, rue Gaspard-Coriolis 44300 Nantes – France Sacer Paris-Nord-Est SA Permanent representative of Colas 6, rue Jean-Mermoz 78771 Magny-les-Hameaux Cedex – France Sacer Sud-Est SA Permanent representative of Colas Échangeur Lyon – 2, avenue Tony-Garnier 69007 Lyon – France Screg Grands Travaux SA Permanent representative of Spare 2, rue Virginie-Mauvais 54000 Nancy – France Screg Île-de-France – SA Permanent representative of Colas 6, rue Galilée – Quartier Europe Normandie 78280 Guyancourt – France Screg Nord-Picardie SA Permanent representative of Colas Échangeur Lille – 197, rue du 8-Mai-1945 BP 10135 – 59653 Villeneuve-d'Ascq Cedex – France Screg Ouest SA Permanent representative of Colas Échangeur Nantes – 2, rue Gaspard-Coriolis 44300 Nantes – France Screg Sud-Est SA Permanent representative of Colas Échangeur Lyon – 2, avenue Tony-Garnier 69007 Lyon – France Screg Sud-Ouest SA Permanent representative of Colas Immeuble Échangeur – 14 avenue Becquerel 33700 Mérignac – France Socatop SARL Manager 5, cours Ferdinand-de-Lesseps 92500 Rueil-Malmaison – France Société Parisienne SA Permanent representative of IPF 2/4, allée Latécoère d’Études, d’Informatique 78140 Vélizy-Villacoublay – France et de Gestion

58 Colas Group Notes to the report of the Board of Directors Name of company Type O$ ce in the company Head o$ ce

Jean-François Guillemin Bouygues Telecom SA Permanent representative of Bouygues 32, avenue Hoche 75008 Paris – France Bouygues Construction SA Director 1, avenue Eugène-Freyssinet 78065 Guyancourt – France Bouygues Immobilier SA Director 3, boulevard Gallieni 92130 Issy-Les-Moulineaux – France Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Fondation d’Entreprise FDT Member of the Board 32, avenue Hoche Francis Bouygues 75008 Paris – France Université Paris-II EP Director 12, place du Panthéon 75231 Paris – France PRES Sorbonne Université EP Director 12, place du Panthéon 75231 Paris – France

Jacques Leost Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Colas Australia Ltd Director PO Box 163 – 12 Grand Avenue – Granville (ex-Drawmac) NSW 2142 – Australia Hincol Ltd Alternate Director for Hervé Le Bouc 5 H Floor Richardson – Crudas Build Sir JJ Road BY 400008 Mumbai – India Tipco Asphalt (Tasco) SA Director Tipco, 118/1 Rama 6 road – Samsen Nai, Phayathai – 10400 Bangkok – Thailand Spac SA Director, 13, rue Madame-de-Sanzillon Chairman and Chief Executive O$ cer 92112 Clichy – France

Colette Lewiner Bouygues SA Director 32, avenue Hoche 75008 Paris – France Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Nexans SA Director 8, rue du Général-Foy 75008 Paris – France La Poste SA Director 44, boulevard de Vaugirard (up to April 2011) 75015 Paris – France TGS Nopec Geophysical ASA Director Hagaloekkveien 13 N-1383 Asker Company Norway Lafarge SA Director 61, rue des Belles-Feuilles 75016 Paris – France TDF SAS Director 106, avenue Marx-Dormoy Chairwoman 92541 Montrouge Cedex – France Eurotunnel SA Director 3, rue de la Boétie 75008 Paris – France

Notes to the report of the Board of Directors Colas Group 59 Name of company Type O$ ce in the company Head o$ ce

Philippe Marien Bouygues Telecom SA Director, 32, avenue Hoche Chairman of the Board 75008 Paris – France Télévision Française 1 (TF1) SA Permanent representative of Bouygues 1, quai du Point-du-Jour 92100 Boulogne-Billancourt – France Colas SA Permanent representative of Bouygues 7, place René-Clair 92100 Boulogne-Billancourt – France Alstom SA Permanent representative of Bouygues 3, avenue André-Malraux 92300 Levallois-Perret – France Bouygues Immobilier SA Permanent representative of Bouygues 3, boulevard Gallieni 92130 Issy-les-Moulineaux – France Bouygues Construction SA Permanent representative of Bouygues 1, avenue Eugène-Freyssinet 78280 Guyancourt – France Finamag SC Liquidator 19, route des Gâtines 91370 Verrières-le-Buisson – France SCDM SAS Managing Director 32, avenue Hoche 75008 Paris – France

Thierry Montouché Colas SA Director, 7, place René-Clair Secretary of the Board 92100 Boulogne-Billancourt – France Colas Inc. Inc. Director 163 Madison Avenue, suite 500 NJ 07960 Morristown – United States ColasCanada Inc. Director 4984 place de la Savane H4P 2M9 Montreal – Canada Colas Ltd Ltd Director Rowfant – RH104NF Crawley (West Sussex) Great Britain Ensign Holdings Highways Ltd Director Rowfant – RH104NF Crawley (West Sussex) Great Britain Colas Teoranta Ltd Director Unit G1 Maynooth Business Campus Maynooth – Co. Kildare – Northern Ireland ICB Emulsions Limited Ltd Director 76 Ballyhannon Road – Portadown – Craigavon BT 635 SE Country Armagh, Ireland Aximum SA Permanent representative of Spare 41, boulevard de la République 78400 Chatou – France Colas Centre-Ouest SA Permanent representative of Spare Échangeur Nantes – 2, rue Gaspard-Coriolis 44300 Nantes – France Colas Est SA Permanent representative of Spare Immeuble Échangeur – 44, boulevard de la Mothe 54000 Nancy – France Colas Île-de-France SA Permanent representative of Spare 2, rue Jean-Mermoz – BP 31 Normandie 78771 Magny-les-Hameaux – France Colas Midi-Méditerranée SA Permanent representative of IPF 345, rue Louis-de-Broglie – La Duranne 13792 Aix-en-Provence – France Colas Rhône-Alpes SA Permanent representative of Spare Échangeur Lyon – 2, avenue Tony-Garnier Auvergne 69007 Lyon – France Colas Rail SA Permanent representative of Colas 38/44, rue Jean-Mermoz 78600 Maisons-La$ tte – France Colas Sud-Ouest SA Permanent representative of IPF Échangeur Sud-Ouest 6, avenue Charles-Lindbergh 33700 Mérignac – France Développement SAS Director Échangeur Lyon – 2, avenue Tony-Garnier Infrastructures 69007 Lyon – France Fondation Colas FDT Director 7, place René-Clair 92100 Boulogne-Billancourt – France Screg Est SA Permanent representative of Spare Immeuble Échangeur 44, boulevard de la Mothe 54000 Nancy – France

60 Colas Group Notes to the report of the Board of Directors Name of company Type O$ ce in the company Head o$ ce Smac SA Permanent representative of Spare 40, rue Fanfan-la-Tulipe 92100 Boulogne-Billancourt – France Spac SA Permanent representative of Colas 13, rue Madame-de-Sanzillon 92112 Clichy – France Société Parisienne SA Permanent representative of Spare 2/4, allée Latécoère d’Études, d’Informatique 78140 Vélizy-Villacoublay – France et de Gestion

Christian de Pins Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France Aximum SA Permanent representative of IPF 41, boulevard de la République (up to July 2011) 78400 Chatou – France Aximum SA Permanent representative of 41, boulevard de la République Développement Infrastructures 78400 Chatou – France Colas Belgium SA Chairman of the Board 313, rue Nestor Martin 1082 Bruxelles – Belgium Colas Danmark A/S Director Fabriksparken 40 2600 Glostrup – Denmark Colas Environnement SAS Director 7, place René-Clair 92100 Boulogne-Billancourt – France Colas Ltd Ltd Director Rowfant – RH104NF Crawley (West Sussex) Great Britain Colas Rail SA Permanent representative of IPF 38/44, rue Jean-Mermoz 78600 Maisons-La$ tte – France Colas Holdings (IOM) Ltd Director Rosehill – Malew, Broom House Isle of Man Im 3DW – Great Britain Colas Suisse Holding Ltd Director 20, route de Berne, Case postale 96, CH 1010 Lausanne – Switzerland Colas Teoranta SA Director Unit G1 Maynooth Business Campus Maynooth – Co. Kildare – Northern Ireland Ensign Holdings Highways Ltd Director Rowfant – RH104NF Crawley (West Sussex) Great Britain ICB Emulsions Limited Ltd Director 76 Ballyhannon Road Portadown – Craigavon BT 635 SE County Armagh – Ireland Carrières Roy SA Director Le Noubleau – BP 1 (up to June 2011) 79330 Saint-Varent – France SES Nouvelle SAS Member of the Board of Trustees 102, avenue des Champs-Elysées 75008 Paris – France Smac SA Permanent representative of Colas 40, rue Fanfan-la-Tulipe 92100 Boulogne-Billancourt – France Spac SA Permanent representative of Spare 13, rue Madame-de-Sanzillon 92110 Clichy – France

Jean-Claude Tostivin Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France 32 Hoche GIE Permanent representative of SCDM 32, avenue Hoche 75008 Paris – France Ceﬁ na SAS Member of the Executive Committee 132, boulevard Haussmann 75008 Paris – France Financière SBP SARL Non-associate Manager 16-18, impasse d'Antin (formely Société 75008 Paris – France de Banque Privée) Qualite SNC Non-associate Manager 32, avenue Hoche 75008 Paris – France Scar SNC Manager 32, avenue Hoche 75008 Paris – France

Notes to the report of the Board of Directors Colas Group 61 Name of company Type O$ ce in the company Head o$ ce

Jean-Claude Tostivin (cont.) Actiﬂ y SNC Non-associate Manager 32, avenue Hoche 75008 Paris – France Transport Air GIE Director 32, avenue Hoche 75008 Paris – France Airby SNC Manager 32, avenue Hoche 75008 Paris – France

Gilles Zancanaro Colas SA Director 7, place René-Clair 92100 Boulogne-Billancourt – France C2S SA Director, 3, rue Alfred-Kastler – 17, parc Ariane Chairman and Chief Executive O$ cer 78280 Guyancourt – France Bouygues Construction SA Director 1, avenue Eugène-Freyssinet 78280 Guyancourt – France Société Parisienne SA Director 2/4, allée Latécoère d’Études, d’Informatique 78140 Vélizy-Villacoublay – France et de Gestion

Name of company Type O$ ce in the Permanent Head o$ ce company representative

BOUYGUES Bouygues Telecom SA Director Jean-François 32, avenue Hoche Guillemin 75008 Paris – France C2S SA Director Alain Pouyat 3, rue Alfred-Kastler – 17, parc Ariane 78280 Guyancourt – France Télévision Française 1 (TF1) SA Director Phillippe Marien 1, quai du Point-du-Jour 92100 Boulogne-Billancourt – France Alstom SA Director Phillippe Marien 3, avenue André-Malraux 92300 Levallois-Perret – France Colas SA Director Phillippe Marien 7, place René-Clair 92100 Boulogne-Billancourt – France 32 Hoche GIE Director Philippe Metges 32, avenue Hoche 75008 Paris – France Bouygues Construction SA Director Phillippe Marien 1, avenue Eugène-Freyssinet 78280 Guyancourt – France Bouygues Immobilier SA Director Phillippe Marien 3, boulevard Gallieni 92130 Issy-les-Moulineaux – France

62 Colas Group Notes to the report of the Board of Directors 64 CONSOLIDATED BALANCE SHEET AT DECEMBER 31 65 CONSOLIDATED INCOME STATEMENT 65 STATEMENT OF RECOGNIZED INCOME AND EXPENSE 66 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 67 CONSOLIDATED CASH FLOW STATEMENT 68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated ﬁ nancial statements of the Colas Group at December 31, 2011

Groupe Colas 63 Consolidated balance sheet at December 31

in millions of euros Notes 2011 2010 Property, plant and equipment 3.2 2,524 2,438 Intangible assets 3.3 90 87 Goodwill 3.3 450 445 Investments in associates 3.4 437 422 Other ﬁ nancial assets 3.5 225 174 Deferred taxes and non-current tax assets 3.6 155 138 Non-current assets 3,881 3,704 Inventories 4.1 602 531 Trade receivables 4.1 2,826 2,538 Current tax assets 4.1 15 44 Other receivables and prepayments 4.1 467 435 Cash and cash equivalents 4.2 446 411 Financial instruments 17 18 13 Net current assets 4,374 3,972 Assets held for sale and discontinued operations –– Total assets 8,255 7,676

Share capital and paid-in capital 384 380 Retained earnings 1,713 1,704 Translation reserve 61 37 Net income for the year 336 224 Capital and reserves 2,494 2,345 Minority interests 34 30 Equity 5 2,528 2,375 Long-term debt 8 242 200 Provisions 6.1 750 750 Deferred tax liabilities 7 110 95 Non-current liabilities 1,102 1,045 Advance payments 241 243 Current portion of long-term debt 8 48 50 Current tax liabilities 87 49 Trade payables 2,128 1,872 Provisions 6.2 300 303 Other payables 10 1,675 1,508 Bank overdrafts and short-term loans 114 209 Financial instruments 17 32 22 Current liabilities 4,625 4,256 Liabilities associated to assets held for sale and discontinued operations –– Total equity and liabilities 8,255 7,676

Net ﬁ nancial debt 9 28 (57)

64 Colas Group Consolidated ﬁ nancial statements Consolidated income statement

in millions of euros Notes 2011 2010 Revenue (1) 11/16 12,412 11,661 Raw materials and consumables used (6,086) (5,564) Sta! costs (3,086) (2,982) External services (2,576) (2,427) Taxes, other than income tax (158) (155) Depreciation, amortization and depletion (461) (470) Reversal (allocations) of provisions (114) (173) Change in inventories 31 40 Other operating incomes (2) 12 651 568 Other operating expenses 12 (147) (133) Profi t from operations (current) 12/16 466 365 Extraordinary income 12 6 Extraordinary expenses 12 (58) Profi t from operations 466 313 Financial income 22 20 Financial expenses (46) (50) Interest income (expense) 13 (24) (30) Other fi nancial income 13 18 9 Other fi nancial costs 13 (15) (16) Provision for income taxes 14 (163) (122) Income from associates 59 69 Profi t for the year 341 223 Of which: Minority interest 5 (1) Of which: Equity holders of the parent 336 224 Earnings per share (in euros) 15 10.28 6.86 Basic (in euros) 15 10.28 6.86

(1) Of which recorded outside of France (international) 5,162 4,947

(2) Of which unused provisions and depreciations 107 114

Statement of recognized income and expense

in millions of euros 2011 2010 Profi t for the year 341 223 Non-recyclable items in net income Actuarial gains (losses) regarding employee benefi ts (1) 15 (16) Tax on non-recyclable items in net income (7) 4 Recyclable items in net income Exchange di! erences on controlled companies 15 76 Fair value restatements for fi nancial instruments (6) (2) Tax on recyclable items in net income 2 Share in associates 5 2 Net income recognized directly in equity 24 64 Total recognized income and expense 365 287 Equity holders of the parent 361 287 Minority interest 4 –

(1) Actuarial gains (losses) recognized directly in equity, according to option allowed by revised IAS 19.

Consolidated ﬁ nancial statements Colas Group 65 Consolidated statement of changes in equity

in millions of euros Share Retained Translation Net income Capital and Minority Total capital and earnings reserve for the year reserves interests paid-in capital At January 1, 2010 376 1,553 (40) 387 2,276 34 2,310 Share capital increase 4 4 4 Prior-year profi t allocation 387 (387) Dividends paid (220) (220) (4) (224) Other transactions between (2) (2) (2) shareholders Profi t for the period 224 224 (1) 223 Income (expenses) recognized (14) 77 63 1 64 directly in equity Net profi t and income (expenses) (14) 77 224 287 287 recognized directly in equity Change in scope of consolidation At December 31, 2010 380 1,704 37 224 2,345 30 2,375 Share capital increase 4 4 4 Prior-year profi t allocation 224 (224) Dividends paid (206) (206) (3) (209) Other transactions between (13) 3 (10) 1 (9) shareholders Profi t for the period 336 336 5 341 Income (expenses) recognized 4 21 25 (1) 24 directly in equity (1) Net profi t and income (expenses) 4 21 336 361 4 365 recognized directly in equity Change in scope of consolidation 2 2 At December 31, 2011 384 1,713 61 336 2,494 34 2,528

(1) Detail:

Group Minority Total interests Exchange di! erences 21 (1) 20 Fair value restatement on ﬁ nancial instruments (6) (6) Actuarial gains (losses) regarding employee beneﬁ ts 15 15 Deferred taxes based on these items (5) (5) Total income (expenses) recognized directly in equity 25 (1) 24

66 Colas Group Consolidated ﬁ nancial statements Consolidated cash ﬂ ow statement

in millions of euros 2011 2010 Proﬁ t for the year (including minority interests) 341 223 Adjustments for: −Income from associates (59) (69) −Dividends received from associates 52 33 −Dividends received from unconsolidated companies (3) (3) −Depreciation, amortization and depletion on non-current assets 466 515 −Capital gains on disposal of assets (69) (37) Sub-total 728 662 Interest income (expense) 24 30 Income tax 163 122 Cash from operations 915 814 Income tax paid (96) (171) Changes in current assets and liabilities (41) (109) Cash ﬂ ows from operating activities (a) 778 534

Purchase of tangible and intangible assets (538) (517) Proceeds from sales of properties, plant and equipment 124 43 Net debt on tangible and intangible assets 21 22 Sub-total (393) (452) Acquisitions and disposals of subsidiaries: −Acquisitions of subsidiaries (87) (46) −Disposals of subsidiaries 5 20 −Net debt on acquisitions of subsidiaries 35 2 −Cash acquired 2 21 Sub-total (45) (3) Other investing activities: −Dividends received from unconsolidated companies 3 3 −Changes of other ﬁ nancial assets 4 (5) Sub-total 7 (2) Cash ﬂ ows from investing activities (b) (431) (457)

Change in equity (Group share) 4 4 Change in minority interests Subsidiaries transactions with minority interests (7) (2) Dividends paid to parent company shareholders (206) (220) Dividends paid to minority interests (3) (4) Net variation from borrowings 20 (19) Interest income (expense) (24) (30) Other fi nancing activities Cash fl ows from fi nancing activities (c) (216) (271) Exchange di! erences and other non-cash variations (d) (1) 13 Net change in cash and cash equivalents (a+b+c+d) 130 (181) Net cash at the beginning of the year 202 383 Net cash and cash equivalents at the end of the year (see note 9) 332 202

Consolidated ﬁ nancial statements Colas Group 67 Notes to the consolidated ﬁ nancial statements

Contents

Notes

General information 11 Income from ordinary activities

1 Accounting standards 12 Other operating income and expenses

2 Signifi cant accounting principles 13 Finance income and expense and policies 14 Income tax 3 Non-current assets 15 Earnings and dividends per share 4 Current assets 16 Segment reporting 5 Information on equity 17 Financial instruments 6 Non-current and current provisions 18 Commitments and contingencies 7 Deferred tax liabilities 19 Workforce and employee benefi ts 8 Current and non-current fi nancial debts 20 Related party disclosures 9 Changes in net fi nancial position 21 Fees of independent auditors 10 Other current liabilities 22 Main exchange rates used for translation

23 Scope of consolidation

In millions of euros (M€) unless otherwise stated.

68 Colas Group Consolidated fi nancial statements General information The fi nancial statements for year ended December 31, 2011 were approved by the Board of Directors and authorized for issue on February 27, 2012. These statements could be amended by the General Meeting of Shareholders. Colas (the Company) is a French public company incorporated in France (RCS Nanterre B552 025 314). Head-o$ ce: 7, place René-Clair, Boulogne-Billancourt, France. These consolidated fi nancial statements are presented in euros because that is the currency of the primary economic environment in which the Group operates.

DESCRIPTION OF GROUP ACTIVITIES • Current operating income increased 28% compared to the end of 2010 to total 466 million euros, thanks Colas is a world leader in the construction to: and maintenance of transport infrastructure −very favorable weather, except for North America; Roads account for 76% of Colas’ business, including: −a strong willed policy focusing on profit margins instead of volume; the construction and maintenance of roads and • −streamlining and improvement actions undertaken highways, airfi eld runways and aprons, ports, industrial in central Europe, as well as in the French overseas sites, logistics platforms, urban networks, reserved- departments, mainland France, and generally speak- lane public transport (tramways), recreational facilities, ing, throughout the Group’s areas as a whole; bike paths, etc.; −continued emphasis on targeted development. upstream from the construction sector, wide-scale • A steep 49% increase was recorded in operating industrial production and recycling of construction • income at 466 million euros, with no non-current materials (aggregates, emulsions and binders, asphalt operating expenses, unlike 2010 when 52 million euros mixes, ready-mix concrete) backed by a dense inter- in non-current operating expenses had to be posted. national network of quarries, gravel pits, emulsion plants, asphalt plants, concrete plants, along with the • The Group share of net profi t at 336 million euros production and sales of bitumen, manufactured in two was up 50% against the end of December 2010. refining units (one in France and one in Malaysia). Net cash totaled 28 million euros at the end of Third-party bitumen trading is made possible by a • December 2011, compared to net debt of 57 million network of depots, the majority of which are located euros at the end of December 2010. outside of France. Other signifi cant events: Colas is also involved in specialized, essentially road- • • −success in concessions and PPPs: launch of A63 related lines of business, representing 24% of Colas’ Highway project, securing of PPP contracts for the activity: Vichy bypass and city street networks in Le Plessis- −road safety and signaling, traffic management, Robinson, High Performance Energy contract for the manufacturing, installation and maintenance of safety City of Paris; equipment; −good commercial success with major highway con- −civil engineering, pipelines; tracts secured in Canada, an airport in Mauritius, tram- −waterproofing, cladding, roofing, production and ways in Dijon, Besançon in France and Casablanca in sales of waterproofi ng membranes; Morocco, rail contracts (light metro in Kuala Lumpur, −building (construction, rehabilitation, deconstruction) ; Malaysia, maintenance of railway network in United −railways (design and engineering, construction, infra- Kingdom); structure renewal and maintenance); −strengthening of foothold in materials sector with −sales of refined oil products other than bitumen the acquisition of 50% of the capital in Gamma (base oil, para$ n, fuels). Materials Ltd (production and sales of aggregates, Colas also works in infrastructure concession and ready-mix concrete, blocks) in Mauritius and the infrastructure management (PPP), in particular for Servant Group in France (quarries and ready-mix highways, city street networks and public transport. concrete).

THE YEAR’S SIGNIFICANT EVENTS SIGNIFICANT FACTS AND CHANGES SUBSEQUENT TO DECEMBER 31, 2011 • Revenue is up 6.4% at 12.4 billion euros (5.1% with unchanged scope of business and comparable None. exchange rates), in an environment that remained dominated by the economic and financial crisis, thanks to growth in the subsidiaries operating in mainland France, in North America, in Asia and Australia, and to a lesser extent in Northern Europe.

Consolidated ﬁ nancial statements Colas Group 69 Note 1 – Accounting standards The Group applied all standards IFRSs and IFRIC interpretations that were issued as of December 31, 2011 and adopted by the European Union.

MAJOR NEW IFRS STANDARDS, AMENDMENTS AND INTERPRETATIONS IN FORCE WITHIN THE EUROPEAN UNION, MANDATORY ON JANUARY 1, 2011: • IFRIC 14: Advance payments regarding minimum funding requirements (no impact on accounts); • IFRIC 19: Extinguishing ﬁ nancial liabilities with equity instruments (no impact on accounts); • Revised IAS 24: Related party disclosures (impact on the annexes submitted in note 20); • Improvement of IFRS (no impact on the accounts).

OTHER MAIN STANDARDS, AMENDMENTS, AND CRITICAL INTERPRETATIONS PUBLISHED BY THE IASB, NOT YET APPROVED BY THE EUROPEAN UNION: IASB published the major standards and following amendments before December 31, 2011, which have not yet entered into force:

Standards Implementation date (*) Expected impact for Group Amendment to IFRS 7: Disclosures regarding transfers July 1, 2011 Impact on notes in progress of fi nancial assets (1) Amendment to IFRS 1: Severe hyperinfl ation and suppression July 1, 2011 No impact of implementation dates for fi rst-time adopters Amendment to IAS 12: Deferred tax: recovery January 1, 2012 No impact of underlying assets Amendment to IAS 1: Presentation of items July 1, 2012 Impact on presentation of other comprehensive income (OCI) (1) of fi nancial statements IAS 28 amended: Investments in associates and joint ventures January 1, 2013 Evaluation in progress IAS 27 amended: Accounting for investments in subsidiaries January 1, 2013 No impact on fi nancial statements IFRS 10: Consolidated fi nancial statements January 1, 2013 Evaluation in progress IFRS 11: Joint arrangements January 1, 2013 Evaluation in progress IFRS 12: Disclosure of interests in other entities Evaluation in progress IFRS 13: Fair value measurement January 1, 2013 Evaluation in progress Amended IAS 19: Employee benefi ts January 1, 2013 Evaluation in progress IFRS 9: Financial instruments – classifi cation and measurement January 1, 2015 Non estimable at this date of fi nancial assets (adoption project suspended by EU)

(*) Unless stipulated to the contrary, applicable to ﬁ scal years beginning from the date indicated in this column. (1) The amendments IFRS 7 and IAS 1 are applicable by anticipation as of January 1, 2011. As of December 31, 2011, the Group has not applied by anticipation any of these standards, amendments and interpretations, except for IAS 1 amendment.

70 Colas Group Consolidated fi nancial statements Note 2 – Signifi cant accounting Transactions in foreign currencies principles and policies Transactions in currencies other than the euro are recorded at rates of exchange prevailing on the dates The financial statements have been prepared in of the transactions. At each balance sheet date, mon- accordance with International Financial Reporting etary assets and liabilities that are denominated in Standards (IFRSs). foreign currencies are retranslated at rates prevailing The fi nancial statements have been prepared on the on the balance sheet date. historical cost basis, except for the revaluation of Exchange differences arising are recorded in the certain fi nancial instruments, and assets and liabilities income statement, except for borrowings in foreign arising from business combinations. currencies, which are hedging investments in a foreign entity. BASIS OF CONSOLIDATION The consolidated fi nancial statements incorporate the Translation of fi nancial statements of foreign fi nancial statements of the Company and entities con- entities trolled by the Company (its subsidiaries) as of On consolidation, assets and liabilities of the Group’s December 31 of each year. Control on these subsidiar- international entities are translated at exchange rates ies is achieved where the Company has the power to prevailing on the balance sheet date; income and govern the fi nancial and operating policies of the con- expense items are translated at average exchange trolled company so as to obtain benefits from its rates for the period, which gives an approximate value activities. of exchange rates prevailing at transaction dates with- On acquisition, the assets and liabilities and contin- out any signifi cant variations. The list of main currency gent liabilities of a subsidiary are measured at their fair rates used is disclosed in note 22. value at the date of acquisition. Any excess of the cost Exchange di! erences, if any, are classifi ed as equity of acquisition over the fair values of the identifi able and transferred to the Group’s translation reserve. net assets acquired is recognized as goodwill. Such translation di! erences are recognized as income Any defi ciency of the cost of acquisition below the fair or expense in the period in which the operation is values of the identifi able net assets acquired (i.e., dis- disposed of. count on acquisition or badwill) is credited to profi t and loss in the period of acquisition. NON-CURRENT ASSETS Subsidiaries are consolidated as of the date on which Property, plant and equipment the Group takes control of the said, and up to the date on which the said control is no longer exercised. Property, plant and equipment acquired separately Where necessary, adjustments are made to the fi nan- are stated at cost less accumulated depreciation and cial statements of subsidiaries to bring the accounting any recognized impairment loss. policies used into line with those used by the Group. Tangible assets acquired through business combina- All intra-group transactions, balances, income and tions are stated at fair value at acquisition date. expenses are eliminated on consolidation. Depreciation is charged so as to write o! the cost of assets over their estimated useful lives, using the Interest in joint ventures straight-line method, on the following basis:

A joint venture is a contractual arrangement whereby O$ ce buildings 20 to 40 years two or more parties undertake an economic activity Industrial buildings 10 to 20 years which is subject to joint control. The assets, liabilities, income and expenses of joint Plant and equipment 5 to 15 years ventures (companies controlled jointly with other Cars, trucks, o$ ce equipment 3 to 10 years partners) are incorporated in these financial state- Land is not depreciated, except for aggregate quarries ments using the proportionate consolidation method. for which depletion is provided using the units-of- production method up to a presumed maximum of Investments in associates forty years. An associate is a non-controlled entity over which the Group is in a position to exercise signifi cant infl uence. Borrowing costs The results, assets and liabilities of associates are When the construction phase of a tangible asset is incorporated in these fi nancial statements using the long, borrowing costs that are directly attributable to equity method of accounting. its acquisition or construction are recognized as an asset. Finance leases Assets acquired under fi nance lease contracts are recognized as assets, and depreciated as if they were purchased by the entity. The fi nance lease liability is accounted for in the balance sheet. Investment property The Group has not identifi ed any investment property among its fi xed assets.

Consolidated fi nancial statements Colas Group 71 Intangible assets Financial assets represent the amount of works com- Intangible assets are identifi able non-monetary assets. pleted, plus cumulative interest, determined according They are separable and can be independently rented, to the e! ective interest rate method, and after deduc- sold, exchanged or transferred. They arise from con- tion of payments received from the client. tractual or legal rights, even if the rights are not sepa- Other fi nancial assets rable. They are without physical substance. Other fi nancial assets are stated at nominal value less Intangible assets acquired separately from a business any possible allowance for depreciation. are stated at cost. Intangible assets acquired as part of a business Follow-up of non-current assets costs combi nation are capitalized separately from goodwill Evaluation of carrying value of non-current assets only if their fair value can be measured reliably on ini- is performed whenever events or changes in the eco- tial recognition. nomic circumstances indicate that the carrying value Start up and research costs are expensed as incurred. of the asset may exceed recoverable value. Development costs can be recognized as assets only For intangible assets with indefinite useful life and if the costs incurred can be reasonably recovered. goodwill, an assessment of the utility value of these Every cost recognized as an asset is amortized on the assets is systematically performed at least once a year, basis of the expected life of the sales related to the even if there is no indication that the asset is impaired. project. To determine the value in use of intangible assets Intangible assets are mainly comprised of software, for which it is not possible to determine independent patents and quarry rights. They are amortized on a cash flow, the assets are grouped within the straight line basis over their useful life. Cash Generating Unit (CGU) to which they belong or consolidated to the Cash Generating Unit for which Goodwill investment return is assessed. Goodwill represents the excess of cost of acquisition Group CGUs correspond to its operational over the fair value of identifi able assets and liabilities organization. of a subsidiary or joint venture at the date of They comply with the following criteria: common acquisition. management, synergies regarding human resources, The Group uses the “partial goodwill” method. equipment resources, technical matters and studies. Goodwill is stated at cost less: −France CGU: road activity in mainland France, and −accumulated amortization recognized before the specialized road-related activities (safety signaling, fi rst time application of the IFRSs; pipes and mains, waterproofi ng). −impairment depreciation recognized since January 1, −Railway CGU: Group rail activity. 2004. −Europe CGU: road activity in European countries where the Group operates. Other fi nancial assets −North America CGU: road activity in the United States of America and Canada. Non-consolidated investments and other investments −DGI and Asia CGU: activity in Africa, Indian Ocean, These mainly comprise shares of unlisted companies. Asia and in French overseas departments and They are recognized at acquisition cost less an allow- territories. ance for depreciation when considered necessary The value in use is determined by the discounted cash (there are no signifi cant di! erences between cost and fl ow method (DCF), which consists of the discount of fair value for these shares). future cash fl ow applying the average weighted capital costs, including the economic risk premium. Future Loans cash flows are determined based on forecasts Loans are stated at present value if their interest rates prepared by CGU management according to yearly are far from the normal market conditions (example: budget procedures for the coming year, and the three- non-interest bearing loans pursuant to legal obliga- year plan for the two following years. tions governing participation of employers in construction investments in France). Financial receivables The twenty-fi ve years road rehabilitation and maintenance PFI (Private Finance Initiative) contract of the City of Portsmouth is stated according to the fi nancial asset model, as recommended under IFRIC 12. Works completed are recognized on the basis of the stage of completion, according to IAS 11. Financial assets are initially recognized at the fair value of works completed, and then stated at cost, according to IAS 39.

72 Colas Group Consolidated fi nancial statements CURRENT ASSETS Some defined benefit plans exist in the United Kingdom, Ireland and Canada. With the exception of Inventories Colas Rail Ltd, these defi ned benefi t plans concern a Inventories are measured at the lowest of the follow- limited number of employees because the Group ing values: cost or net realizable value. decided, several years ago, to close these plans to Inventory costs include all purchase costs and costs new subscribers. These benefi t plans are managed by of conversion. independent funds. Costs of purchase include purchase price, import −Retirement indemnities duties and other non-recoverable taxes, transport and Their cost is determined using the projected unit handling costs. credit method. Actuarial gains and losses are recog- Costs of conversion include costs that are directly nized in equity. or indirectly incurred in converting raw materials into −Length-of-service awards fi nished goods. Provisions are booked in respect of length-of-service For carried forward valuation, costs are assigned awards, which Colas Group companies grant on an by using the fi rst-in, fi rst-out or weighted average cost ongoing and systematic basis. An individual projection formulas, according to the type of inventories. method is used to calculate these amounts, taking Net realizable value is the estimated selling price less into consideration the average rate of employee reve- estimated costs of completion and estimated costs nue and average life expectancy, according to appro- necessary to complete the sale. priate tables. Actuarial gains and losses are posted in the income Trade receivables statement. Trade receivables, which generally have 30-90 day terms, are recognized and carried at original invoice Provisions for litigation and legal matters amount less allowance for any uncollectible amounts. −Litigation and claims about works contracts Trade receivables include “Receivables to invoice” The amount of these provisions is determined based related to the works recognized by clients, and which on the amount of customer’s claim or on costs of have not yet been invoiced. repairs of damages as determined by o$ cial experts; −Provisions for tax, social welfare or administration Cash and cash equivalents audit Cash and cash equivalents in the balance sheet Amounts claimed by authorities are recognized in the comprise cash at bank and in hand and short-term income statement when accepted and are provisioned deposits with original maturity of three months or less. when contested. Marketable securities are stated at their net realizable Provisions for warranties (long term) value. For the purpose of the cash flow statement, These represent the valuation of the works to be per- cash consists of cash and cash equivalents as defi ned formed when the term of the warranty exceeds the above, net of outstanding bank overdrafts. term of the operating cycle (one or two years), such as the ten-year warranty for specifi c building works. EQUITY Provisions for quarry reclamation (long term) The bought back shares are deducted from the equity Reclamation cost after operating a quarry is calcu- attributable to equity holders of the parent. If Group lated based on a detailed valuation (cost of labor, companies hold their own shares, a complementary equipment, materials, the corresponding share of interest percentage is determined at the Group level. overhead required, etc.). Only the portion of the provision regarding costs due after twelve months follow- PROVISIONS ing the balance sheet date is classifi ed in non-current Non-current provisions provisions. These are provisions not linked to the normal operat- Current provisions ing cycle. They essentially comprise: These are provisions linked to the normal operating cycle. The related expenses are generally paid within Employee benefi ts twelve months of the balance sheet date. −Pensions The Group commitments with regard to pensions payable to employees on retirement are, generally, covered by the regular payment of contributions to retirement plans or pension funds (defi ned contribution plans).

Consolidated ﬁ nancial statements Colas Group 73 They mainly comprise: Nature of the risks for the Group

Provisions for warranties Risk management for foreign exchange rates (one or two years maximum) The level of risk is low because subsidiaries generate Provisions for additional works related to contractual only a very small proportion of their revenue from warranties are made in respect of individual estimates export. Revenue from foreign countries is chiefl y gen- for each contract. erated by subsidiaries that issue invoices and book their expenses in local currency. Provisions for closing down sites Occasionally, some currency contracts are hedged for This covers costs of cleaning up a site and removing exchange risks. equipment. These costs are measured individually Borrowings and deposits are centralized in the same based on the size of the site and distance from our currency (euro, US dollar, Canadian dollar, etc.). operating units. Generally, Group investments in foreign companies Provisions for losses on completion (subsidiaries, branches, joint ventures) are not hedged These relate to projects, which are not completed at because these companies are not held to be sold. balance sheet date. The measurement may include Currency swap is mainly used to optimize Group cash claims approved by clients, and is determined con- by converting – without any foreign exchange risks – tract by contract, without compensation. excess cash in one currency, lent to subsidiaries in their own local currency to substitute bank lines. Provisions for quarry reclamation (short term) Activity linked to SRD, Société de la Raffinerie de This covers reclamation costs after operating a quarry, Dunkerque, is more subject to exchange risks because for the portion within twelve months after balance their activity involves the purchase and sales of prod- sheet date. ucts valued in dollars which are then purchased and In compliance with IAS 37 on provisions, information sold in dollars and/or in euros. The risk is managed via regarding the most signifi cant provisions is disclosed a currency swap for dollar fl ows. only to the extent that this disclosure will not harm Risk management for interest rates the Group. The Group profi t and loss is not very sensitive to inter- DEFERRED TAXES AND LONG-TERM TAX est rate changes. On an average annual basis, the LIABILITIES share of variable rate debts is equal to available cash under variable rates – only the seasonal nature of the Deferred tax liabilities are the amounts of income Group’s business requires short-term borrowings. taxes payable in future periods in respect of taxable Some fi nancial assets or liabilities can occasionally be temporary di! erences. All deferred tax liabilities are hedged. stated as deferred taxes, including consolidation Raw materials risks adjustments. Colas can be sensitive to fl uctuations in supply regu- Deferred tax liabilities are recognized for all taxable larity and raw material costs, in particular for oil prod- temporary differences associated with investments ucts (bitumen, fuel, heating oil, oils), in road in subsidiaries, branches and associates, and interests construction as well as for other raw materials such as in joint ventures, except to the extent that the parent steel, copper or aluminum in safety and signaling, company is able to control the timing of the reversal waterproofi ng and railways activities. of the temporary di! erences, and it is probable that The raw materials with the strongest impact on the the temporary di! erences will not reverse in the fore- Group are bitumen and other oil products. seeable future (no disposal in foreseeable future). If disposal of investments or distribution of dividends • Supply risks is probable in the foreseeable future or if the company Delays or disruption of supplies can generate addi- is not controlled (associate), deferred tax liability is tional direct and indirect expenses in roads and water- recognized. proofi ng activities. This risk can fi rst be considered as non-systemic, except in the event of confl ict and full- FINANCIAL INSTRUMENTS fledged disruption of oil supply, which can affect Several Group companies use fi nancial hedging instru- a country or more likely a region for a variable length ments to reduce the impact of exchange and interest of time. This is why Colas created a Group bitumen rate fl uctuations on their profi t and loss accounts. The management division several years ago and bitumen use of these instruments is described hereafter. management divisions in some major geographical zones (North America), for the purpose of reinforcing supply capacities (quantity supply agreements, imports). Colas has also focused on developing storage capacity in mainland France, in Europe, in French

74 Colas Group Consolidated fi nancial statements overseas departments, in the Indian Ocean and, on a Group principles and rules for fi nancial hedging larger scale, in North America. Storage capacities are instruments large compared to bitumen consumption of every Financial hedging instruments used are conventional region. The Group continues to implement a policy instruments such as: aiming at increasing storage capacity whenever possi- −forward currency trade, currency swap, currency ble (acquisition and creation). The acquisition of SRD, options, according to a hedging policy against foreign Société de la Ra$ nerie de Dunkerque, which produces exchange risks; 300,000 tons of bitumen per year, helps signifi cantly −interest rate swap, future rate agreements, purchase optimize bitumen supply security for the road busi- of caps and tunnels and rate options, according to a nesses in mainland France and Northern Europe. hedging policy against interest rate risks; • Risks linked to prices variation −purchase and sale of futures contracts, raw material Bitumen prices have been rocked by major purchase swaps, raw material options according to a hedging price variations over the last several years. Several fac- policy for raw materials. tors help limit the risk of these fl uctuations: number of The above instruments are characterized by the fact contracts and average contract value, which often that they are only used for hedging, only undertaken allow prices to be taken into consideration in the bid, with fi rst rank French banks and foreign banks, and revisions, and indexing clauses in France and else- present no cash risk in the event of turnaround. where around the world. Thanks to awareness drives, The Group follows the use of these instruments, the Group employees often include price variation param- choice of trade o! , and generally speaking, the expo- eters in contractual negotiations. In some regions, sure to exchange risks and interest rate risks with Group companies can sign guaranteed price supply detailed, specifi c follow-up reporting to the manage- contracts for a given period of time. For major con- ment of the companies involved. tracts, when the deal is signed, hedging policies are Cash fl ow hedge underwritten if needed. There is a share of business Cash fl ow hedge consists of hedging cash fl ow arising remaining involving the sales of manufactured prod- from hedged instruments or forecast transactions. ucts to third parties for which bitumen and/or oil When derivative instruments hedge cash fl ow arising product price increases are passed on if the competi- from firm commitments or expected transactions, tive environment does so allow. portions of profi t and loss that are determined to be In light of the above, it is impossible to measure an e! ective hedge are recognized directly in equity. income statement sensitivity given the thousands of The ineffective portion of the hedging instruments contracts performed in a variety of legal environments is reported immediately in profi t and loss. Other resid- in terms of protection, and the difference in price ual profi t or loss arising from the hedging instruments increases between geographical areas. is also reported immediately in profi t and loss. Lastly, an indirect risk exists should the price of these products or services increase for the customer, Fair value hedge because the latter could reduce the volume of orders. Fair value hedges have the purpose of limiting the exposure to changes in the fair value of a recognized • Risks linked to SRD Société de la Raffinerie de asset or liability. Dunkerque activity When a derivative fi nancial instrument covers expo- The activity of the Société de la Raffinerie de sure to changes in the fair value of receivables or Dunkerque acquired in June 2010 is sensitive to raw debts occur, profi t or loss arising from remeasuring material price fl uctuations. The net income of a spe- the hedging instrument at fair value is recognized cialty products refinery is based on the difference directly in net profi t and loss. The gain or loss on the between the sales price of the products it produces hedged item attributable to the hedged risk adjusts (oil, para$ n wax, bitumen and fuels) and the price of the carrying amount of the hedged item and is recog- the raw materials processed by the refi nery (atmos- nized directly in net profi t or loss. Fair value of hedged pheric residue fuel, hydrocrackates and feedstocks). items, according to the type of risk hedged, corre- The refi nery profi t margin is linked to the said price sponds to the carrying amount, translated into euros di! erence. at the exchange rate prevailing on the balance sheet The supply/production/sale cycle is fast and purchase date. contracts are tailor-made to reduce that risk. A commitment committee is in charge of raw materials purchasing. The raw materials are purchased in month “A”, used in production in A+1 month, and manufactured products are sold in A+1 month, A+2 months or A+3 months. A hedging policy to reduce these risks has been implemented.

Consolidated fi nancial statements Colas Group 75 Accounting policies for fi nancial instruments INCOME STATEMENT The Group applies accounting methods as defi ned by Ordinary activity income IAS 39, i.e.: Income from operations is recognized when it is prob- Criteria for recognition of fi nancial assets able that future economic benefits will flow to the or liabilities Group, and costs incurred regarding these transac- Hedging accounting is applied when derivative fi nan- tions can be measured reliably. cial instruments compensate, partially or totally, for Ordinary activity income comprises: fair value or cash flow hedge changes of a hedged item. E! ectiveness of hedges is regularly measured, at Sale of goods least quarterly. Income is recognized when risks and rewards of own- Nevertheless, in specific cases (non-significant ership are transferred to the buyer. notional amounts, short-hedging maturities, limited Construction contracts and rendering of services impact on profi ts or losses), fi nancial instruments are Revenue from construction contracts is recognized voluntarily not recognized as hedging transactions, in based on the “stage of completion” method. order to simplify the Group administrative procedures. The stage of completion is determined on the basis of In these cases, variations of fair value of hedging works completed; expected loss on completion is instruments are recognized directly in net profi t and directly recognized as an expense in the current loss. period. Basis of valuation of fi nancial assets and liabilities Other ordinary activity income Financial assets and liabilities are stated at cost or This consists of royalties received from the use of amortized cost. licenses and patents: income is recognized when the Accounting of fi nancial instruments stated Company’s right to receive payment is established. at fair value The Group uses very few fi nancial instruments; deriva- Government grants tive fi nancial instruments are stated at fair value. Their These are recognized as income when there is a rea- fair value is determined with valuation methods, such sonable assurance that they will be received, and the as options valuation models and the value in use Company will comply with the conditions stipulated method (discounted cash flows). These models are therein. based on assumptions regarding market fi gures. When the Government grant is a compensation for Accounting of profi t and loss generated by fi nancial expenses, it is recognized as income over the period instruments which bears the related costs. Financial assets and liabilities are initially stated at Government grants related to assets are presented on their fair value. Unrealized profi t and losses are rec- the balance sheet as a deduction of the related asset. ognized according to the nature of the hedged item. At balance sheet date, interest swap fair value is the Share in net profi t of unconsolidated amount expected to be received or paid by the Group joint ventures to close down transactions. Fair value is measured This mainly comprises the share of the Group in the on the basis of present interest rates and credit risks. net results posted by the companies or partnerships Fair value of forward currency trades is market value producing asphalt mixes or binders operated in con- at balance sheet date, i.e., present value of quotations junction with other associates. or forward market rates. Results of operating activities Results of operating activities come mainly from activities generating income, and all other activities which are not investing or fi nancing activities. Goodwill depreciation is included in results of operating activities.

Other non-current results These concern a very small number of unusual, abnor- mal and uncommon income or expense – with very significant amounts – disclosed separately in the income statement to improve the understanding of current operational performance. The nature of these items is described in note 12.

Interest income (expense) This includes ﬁ nancial expense and income, and borrowing costs.

76 Colas Group Consolidated fi nancial statements Income tax OTHER INFORMATION Deferred taxes are determined in accordance with the Comparability of consolidated fi nancial balance sheet liability method, for all the taxable or statements deductible temporary differences, at balance sheet date. Changes in scope of consolidation did not have any Taxable or deductible temporary di! erences include signifi cant impact on the consolidated fi nancial state- every di! erence between the tax base of an asset or ments for 2011; they are comparable to the previous liability and its carrying amounts on the balance sheet, years’ fi nancial statements. except for goodwill. Events after balance sheet date When, for a company, the net tax balance is an asset, that asset is recognized only to the extent that it is None. probable that taxable profi t will be available against these deductible temporary di! erences. Nature and scope of risks and uncertainties Deferred tax assets or liabilities are measured on the The main risks and uncertainties which could signifi - basis of tax rates expected to be applied during the cantly impact the Group‘s businesses are as follows: year of the reversal, based on tax rates which have −weather conditions which have a direct impact on been enacted or substantially enacted by the balance the way in which projects unfold worldwide, and sheet date. in particular, in countries with harsh climates; −the cost of raw materials depending on oil cost CASH FLOW STATEMENT (bitumen, fuel, heating fuel) and other raw materials The cash flow statement is prepared based on the such as steel or aluminum which are used in the safety indirect method. and waterproofing activities. This risk is reduced According to this method, net income is adjusted for by the fact that a large share of contracts benefi t from the effect of non-cash transactions or the gap price variation clauses and by the fact that many con- between operating cash input or output, past or tracts cover small-scale projects that are completed in future, and investing and fi nancing activity cash fl ows. a short amount of time; Net Group cash, which is analyzed in the cash flow −the level of investment backed by the public sector statement, is defi ned as the net balance of: and by the industrial and commercial private sectors; −cash-at-bank, cash-on-hand and short-term deposit; −the impact of variations in exchange rates, especially −outstanding bank overdrafts and short-term loans. the US dollar, even if the said risks are limited by the Cash generated from operations includes variations fact that over 60% of revenue is accounted for in in provisions on current assets. It includes in particular euros and by the fact that operations carried out on a net profi t from consolidated companies and income local scale make it possible to post income and from associates, net of dividends received from them. expenses in identical currency. The classifi cation applied for interest and dividends discloses the said in cash fl ow from fi nancing activities. Interest paid during the year corresponds to interest disclosed in the income statement.

Consolidated ﬁ nancial statements Colas Group 77 Note 3 – Non-current assets

3.1 – SYNTHESIS OF INVESTMENTS OF THE YEAR (OPERATIONAL AND FINANCIAL)

2011 2010 Property, plant and equipment 527 499 Intangible assets and goodwill 11 18 Operating activities investments 538 517 Non-consolidated investments and other long-term investments 87 46 Consolidated investments 625 563 Proceeds from sales of tangible and intangible assets (124) (43) Proceeds from disposals of subsidiaries (5) (20) Net investments 496 500

78 Colas Group Consolidated ﬁ nancial statements 3.2 – PROPERTY, PLANT AND EQUIPMENT

Land and Plant and Assets in course Total buildings equipment of construction and advance payments Cost or valuation At January 1, 2010 1,314 4,351 57 5,722 Exchange di! erences 31 122 1 154 Transfers and other 9 69 (73) 5 Changes in scope of consolidation 14 133 18 165 Additions 54 345 100 499 Disposals (17) (182) (199) At December 31, 2010 1,405 4,838 103 6,346 Exchange di! erences 7 23 30 Transfers and other 20 62 (81) 1 Changes in scope of consolidation 33 13 (1) 45 Additions 61 377 89 527 Disposals (69) (239) (308) At December 31, 2011 1,457 5,074 110 6,641

Depreciation and impairment At January 1, 2010 (480) (2,948) (3,428) Exchange di! erences (9) (74) (83) Transfers and other 3 (3) Changes in scope of consolidation (7) (113) (120) Net charge for the year (55) (404) (459) Disposals 12 170 182 At December 31, 2010 (536) (3,372) (3,908) Exchange di! erences (1) (16) (17) Transfers and other 1 7 8 Changes in scope of consolidation 1 (1) Net charge for the year (53) (398) (451) Disposals 40 211 251 At December 31, 2011 (548) (3,569) (4,117)

Carrying amount At January 1, 2010 834 1,403 57 2,294 Including fi nancial leases 6 49 55 At December 31, 2010 869 1,466 103 2,438 Including quarry land 307 307 Including fi nancial leases 5 46 51 At December 31, 2011 909 1,505 110 2,524 Including quarry land 343 343 Including fi nancial leases 5 36 41

At December 31, 2011 equipment has been ordered for an amount of 51 million euros (82 million euros at the end of 2010).

Consolidated ﬁ nancial statements Colas Group 79 3.3 – INTANGIBLE ASSETS AND GOODWILL

Concessions, Other Total intangible Goodwill patents, and assets other rights Cost or valuation At January 1, 2010 108 47 155 491 Exchange di! erences 1 2 3 8 Transfers 1 1 3 Changes in scope of consolidation 2 4 6 (10) Additions 2 12 14 4 Disposals (1) (1) (2) At December 31, 2010 113 64 177 496 Exchange di! erences (1) 2 1 2 Transfers 1 (2) (1) 1 Changes in scope of consolidation 3 1 4 5 Additions 3 8 11 Disposals (2) (1) (3) At December 31, 2011 117 72 189 504

Depreciation and impairment At January 1, 2010 (49) (28) (77) (24) Exchange di! erences (1) (1) (2) Transfers (1) Changes in scope of consolidation (1) (1) 3 Net charge for the year (6) (5) (11) (29) Disposals 1 1 At December 31, 2010 (56) (34) (90) (51) Exchange di! erences (1) (1) Transfers (1) 1 Changes in scope of consolidation Net charge for the year (6) (4) (10) (3) Disposals 2 2 At December 31, 2011 (61) (38) (99) (54)

Carrying amount At January 1, 2010 59 19 78 467 At December 31, 2010 57 30 87 445 At December 31, 2011 56 34 90 450

Concessions, patents, and other rights: mainly mining rights, and to a lesser extent patents and software. Development costs: they are mainly recognized as expenses during the year because they have a permanent and recurrent nature; few projects satisfy recognition criteria according to IAS 38.

Impairment of intangible assets with indeﬁ nite useful life and goodwill Impairment losses are recorded in profit from operations if the carrying amount of an asset or its Cash Generating Unit (CGU) exceeds its value in use. If an indication shows impairment loss, an impairment test is performed, based on the method described under note 2. Such tests are performed at least once a year after the updating of budgets and three-year plans by management.

80 Colas Group Consolidated ﬁ nancial statements Details of assets with indeﬁ nite useful life and goodwill split by CGU and main assumptions used for impairment tests are as follows:

Cash Generating Units Intangible assets with Goodwill Growth rates Discount indeﬁ nite useful life rates

A1 (1) A2 (1) CGU France 20 165 2% 6.16% 4.40% CGU Rail 182 2% 6.16% 4.40% CGU Europe (excluding France) 6 18 2% 6.16% 4.40% CGU North America 48 2% 6.16% 4.40% CGU DGI and Asia 37 2% 6.16% 4.40% Total 26 450

(1) According to debt structure assumptions: – A1: 1/3 debt – 2/3 equity. – A2: 2/3 debt – 1/3 equity.

Sensitivity analyses were performed. Any reasonably possible change in key assumptions used did not reveal a situation that could lead to impairment of assets tested.

3.4 – INVESTMENTS IN ASSOCIATES

Share Goodwill Depreciation Carrying in equity of goodwill amount At January 1, 2010 383 10 (5) 388 Exchange di! erences 3 3 Transfers (2) (2) Changes in scope of consolidation (4) (4) Issue of share capital 1 1 Net consolidated proﬁ t 65 65 Dividends paid (33) (33) Impairment 4 4 At December 31, 2010 413 10 (1) 422 Exchange di! erences 5 5 Transfers 1 1 Changes in scope of consolidation 1 1 2 Issue of share capital Net consolidated proﬁ t 59 59 Dividends paid (52) (52) Impairment Other variations At December 31, 2011 427 11 (1) 437

Main associated companies

Company Head o$ ce % hold Share in equity Goodwill Goodwill Net carrying impairment amount Coﬁ route (1) France 16.7% 357 357 Tipco Asphalt (2) Thailand 32.1% 31 5 36 Mak Mecsek (3) Hungary 30.0% 24 24 Other (4) 15 6 (1) 20 Total 427 11 (1) 437

(1) Cofi route operates a 1,100-km highway concession in northwest France (A10, A11, A13, A86 Highways, etc.). Although Colas holds a stake of less than 20% (16.7%), Cofi route is consolidated using the equity method, because Colas exercises a signifi cant infl uence through the Board of Directors (Director: Hervé Le Bouc). (2) Tipco Asphalt operates in the distribution and sale of bitumen business in southeast Asia. The company is listed on the Bangkok Stock Exchange (Thailand). (3) Mak Mecsek has been awarded a thirty-year PFI contract for the construction and operation of a new 80-km section of M6 (50 km) and M60 (30 km) Motorways in southwest Hungary. (4) None of these entities are signifi cant on an individual basis.

Consolidated ﬁ nancial statements Colas Group 81 For the three main associated entities, the total amounts posted as main assets, liabilities, income and expenses are provided below:

At December 31, 2011

Amounts at 100% Cofi route Tipco Asphalt Mak Mecsek Non-current assets 5,825 123 928 Current assets 655 387 20 Total assets 6,480 510 948 Equity 2,142 98 80 Non-current liabilities 3,665 78 864 Current liabilities 673 334 4 Total liabilities 6,480 510 948 Revenue 1,331 522 81 Profi t from operations (current) 602 41 51 Profi t for the year 294 15 9 Of which: Equity holders of the parent 49 5 3

At December 31, 2010

Amounts at 100% Cofi route Tipco Asphalt Mak Mecsek Non-current assets 5,841 120 942 Current assets 568 151 17 Total assets 6,409 271 959 Equity 2,150 68 71 Non-current liabilities 3,726 78 885 Current liabilities 533 125 3 Total liabilities 6,409 271 959 Revenue 1,292 612 58 Profi t from operations (current) 584 34 36 Profi t for the year 312 24 7 Of which: Equity holders of the parent 52 7 2

3.5 – OTHER NON-CURRENT FINANCIAL ASSETS

Non-consolidated Other Total gross Allowance Carrying investments long-term value amount investments At January 1, 2010 51 151 202 (29) 173 Exchange di! erences 3 3 3 Transfers 1 1 1 Changes in scope of consolidation 10 10 (2) 8 Acquisitions and other additions 4 14 18 18 Disposals (12) (10) (22) (22) Net charge for the year (7) (7) At December 31, 2010 54 158 212 (38) 174 Exchange di! erences 3 3 3 Transfers Changes in scope of consolidation (5) (5) (1) (6) Acquisitions and other additions 53 16 69 69 Disposals (3) (20) (23) (23) Net charge for the year 8 8 At December 31, 2011 99 157 256 (31) 225

82 Colas Group Consolidated ﬁ nancial statements Breakdown of main non-consolidated investments

31/12/2011 31/12/2010

Gross Allowance Net Net Binder, asphalt concrete and quarry companies 22 (5) 17 17 Non-controlled companies 16 (2) 14 14 Companies acquired at the end of the year (1) 46 46 2 Other investments (2) 15 (6) 9 9 Total 99 (13) 86 42

(1) These companies, not consolidated because acquired at year-end, will be consolidated during the coming year. This mainly includes Servant (Group), Soﬁ ma and Whitmer Holdings. (2) None of these investments are signiﬁ cant.

Breakdown of other ﬁ nancial assets

31/12/2011 31/12/2010

Gross Allowance Net Net Loans (1) 59 (17) 42 37 Deposits 22 (1) 21 18 City of Portsmouth (Great Britain) (2) 76 76 77 Other ﬁ nancial receivables Total 157 (18) 139 132

(1) Loans: mainly twenty-year non-interest bearing loans, pursuant to employers’ legal obligations governing construction investments in France. These loans are stated at their net present value. (2) Receivables from the City of Portsmouth (Great Britain), in compensation for the works completed in the framework of the road rehabilitation and maintenance PFI contract, signed in 2004 for twenty-ﬁ ve years (2004-2029). The receivable is valued according to IFRIC 12 (ﬁ nancial asset model).

Breakdown of non-current ﬁ nancial assets by nature

Fair value measurement

Financial assets Other ﬁ nancial Loans and Total available for sale assets receivables January 1, 2011 – 42 132 174 2011 variations – 44 7 51 December 31, 2011 – 86 139 225

3.6 – DEFERRED TAXES AND NON-CURRENT TAX ASSETS

Deferred taxes Other long-term Total tax assets At January 1, 2010 102 102 Exchange di! erences 1 1 Transfers (4) (4) Acquisitions of subsidiaries 23 23 Net variations 16 16 At December 31, 2010 138 138 Exchange di! erences 1 1 Transfers 9 9 Acquisitions of subsidiaries Net variations 7 7 At December 31, 2011 155 155

Unrecognized tax assets (which are probably not reversible in the foreseeable future) amounted to 59 million euros on December 31, 2011 (58 million euros on December 31, 2010). Deferred tax assets are mainly reversible after ﬁ ve years.

Consolidated ﬁ nancial statements Colas Group 83 Main deferred tax bases

31/12/2011 31/12/2010 Assets Employee beneﬁ ts 61 66 Tax losses 26 29 Financial instruments 10 7

Liabilities Regulatory provisions (23) (29) Fixed assets (ﬁ nance leases) (17) (16) Taxes on dividends (6) (6) Financial instruments (5) (4) Other temporary di! erences (1) (4) Net deferred tax assets (liabilities) 45 43

Note 4 – Current assets

4.1 – INVENTORIES, TRADE AND OTHER RECEIVABLES

31/12/2011 31/12/2010

Gross Allowance Net Gross Allowance Net Inventories 625 (23) 602 552 (21) 531 Raw materials, supplies and ﬁ nished goods Trade receivables 2,955 (129) 2,826 2,679 (141) 2,538 Invoiced and to invoice (1) Tax receivables 15 15 44 44 Sta! , social welfare bodies, 241 241 226 226 State Group receivables 206 (13) 193 190 (10) 180 and other receivables Prepayments 33 33 29 29 Other receivables 480 (13) 467 445 (10) 435

(1) Maturity of trade receivables is as follows:

Receivables Less than 6 months 1 year and more Total not matured 6 months to 1 year Trade receivables (gross) 2,042 635 97 181 2,955 Allowance (4) (13) (12) (100) (129) Trade receivables (net) 2,038 622 85 81 2,826 Reminder 2010 1,734 605 93 106 2,538

Credit risk: the Group considers that its exposition to credit risk regarding non-matured receivables is limited as regards the type of customers (States, public administrations, public and private companies, individuals).

4.2 – CASH AND CASH EQUIVALENTS

31/12/2011 31/12/2010

Gross Allowance Net Gross Allowance Net Cash on hand 360 360 333 333 Bouygues Relais cash management 25 25 42 42 company Marketable securities 61 61 36 36 Total 446 446 411 411

84 Colas Group Consolidated ﬁ nancial statements Short-term investments are deposited in French and foreign banks. They are divided as follows:

Euro USD (1) GBP (1) Other (1) Total Cash-on-hand 113 36 64 147 360 Bouygues Relais cash management company 25 25 Marketable securities 52 1 8 61 Total at December 31, 2011 190 37 64 155 446 December 31, 2010 158 23 58 172 411

(1) Equivalent in euros.

Cash and cash equivalents have an original maturity of three months or less or can easily be converted into cash. Cash and cash equivalents disclosed in the cash ﬂ ow statement consist of the following items:

31/12/2011 31/12/2010 Cash and cash equivalents 446 411 Bank overdraft and short-term loans (114) (209) Total 332 202

Note 5 – Information on equity

COMPOSITION OF SHARE CAPITAL Colas’ share capital on December 31, 2011 amounts to 48,981,748.50 euros. It is comprised of 32,654,499 shares at 1.50 euros each, ranking pari passu (although nominative shares owned for a period of more than two years by the same shareholder grant double voting rights).

YEAR VARIATIONS (Amounts in euros)

Number of shares Share capital At January 1, 2011 32,624,790 48,937,185.00 Part of dividend paid in shares 29,709 44,563.50 At December 31, 2011 32,654,499 48,981,748.50

MAIN SHAREHOLDERS

Bouygues SA 31,526,344 96.55% Other shareholders 1,128,155 3.45%

CAPITAL MANAGEMENT The General Management’s target is to maintain a level of capital and reserve to enable Colas to: −ensure reasonable gearing; −pay regular dividends to shareholders. Among performance indicators used, some can be determined by reference to capital and reserves, but their use is neither preponderant nor systematic. Otherwise, we remind you that capital and reserves are not submitted to any statutory restriction.

STOCK OPTIONS None.

Consolidated ﬁ nancial statements Colas Group 85 TRANSLATION RESERVE The translation reserve was established at January 1, 2004 with the ﬁ rst time application of IFRS. Main translation di! erences at December 31, 2011 relate to companies located in the following countries:

31/12/2011 31/12/2010 United States 2 (11) Canada 35 32 Great Britain (11) (13) Slovakia 12 11 Czech Republic 7 9 Australia 8 7 Other countries 8 2 Total translation reserve 61 37

Note 6 – Non-current and current provisions

6.1 – NON-CURRENT PROVISIONS

Employee Litigation and Customer Quarry Others Total beneﬁ ts legal matters warranties reclamation (long-term) (long-term) At January 1, 2010 248 200 89 99 27 663 Exchange di! erences 1 1 2 4 Transfers 1 2 1 3 7 Changes in scope 19 (1) 15 16 49 of consolidation Actuarial gains/losses in equity 16 16 Allocation for the year 25 67 23 15 20 150 Provisions used (32) (26) (14) (9) (3) (84) Provisions reversed (2) (29) (17) (3) (4) (55) At December 31, 2010 276 213 83 122 56 750 Exchange di! erences 1 (1) (1) (1) Transfers (5) 3 (1) (3) Changes in scope 16 (16) of consolidation Actuarial gains/losses in equity (15) (15) Allocation for the year 21 55 21 12 20 129 Provisions used (16) (20) (11) (6) (9) (62) Provisions reversed (2) (26) (15) (1) (4) (48) At December 31, 2011 260 221 80 142 47 750

86 Colas Group Consolidated ﬁ nancial statements Breakdown of main provisions

31/12/2011 31/12/2010 Length-of-service awards 75 77 Retirement indemnities 135 144 Pensions 50 55 Employee beneﬁ ts 260 276 Litigation with clients 83 92 Litigation with employees 14 14 Litigation with welfare bodies 74 65 Litigation with tax authorities 21 19 Litigation with other bodies 14 12 Other litigations 15 11 Litigation and legal matters 221 213 Decennial warranties 47 51 Civil engineering warranties 31 30 Performance warranties 2 2 Warranties 80 83

6.2 – CURRENT PROVISIONS

Losses on Works risks and Customer Quarry Other Total completion costs of closing warranties reclamation down sites (short-term) (short-term) At January 1, 2010 57 95 54 14 65 285 Exchange di! erences 1 1 3 5 Transfers 2 (13) (11) Changes in scope (1) (1) of consolidation Allocation for the year 45 52 26 1 31 155 Provisions used (28) (18) (15) (4) (17) (82) Provisions reversed (14) (20) (10) (2) (2) (48) At December 31, 2010 60 109 56 11 67 303 Exchange di! erences Transfers 1 (2) (2) 1 (2) Changes in scope (1) (1) of consolidation Allocation for the year 51 39 24 2 23 139 Provisions used (32) (26) (14) (3) (21) (96) Provisions reversed (13) (17) (9) (1) (3) (43) At December 31, 2011 67 103 54 10 66 300

Note 7 – Deferred tax liabilities

31/12/2011 31/12/2010 Deferred tax liabilities 110 95 Other long-term tax liabilities Total non-current taxes 110 95

Deferred tax liabilities essentially include temporary tax di! erences (allocations of goodwill, di! erences between accounting and ﬁ scal depreciations, etc.).

Consolidated ﬁ nancial statements Colas Group 87 Note 8 – Current and non-current ﬁ nancial debts

CASH RISKS At December 31, 2011, net cash totaled 332 million euros, in addition to 1,400 million euros of confi rmed medium- term bank credit lines undrawn to date. During the year, Colas renewed an assignment of receivables program confi rmed due in 2014 for an amount of 300 million euros. The Group is not exposed to any cash risks. Colas Group companies’ confi rmed bank loan contracts contain no signifi cant fi nancial clauses likely to lead to early termination and/or early repayment.

BANK LOANS AND BORROWING MATURITIES

Maturity Maturity over one year less than 1 year From From From From 5 years Total Total 2012 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years and more 2011 2010 2013 2014 2015 2016 2017 and beyond Bank loans (medium- 30 34 19 15 116 214 171 long term) Finance leases 9 5 4 4 2 24 25 Other ﬁ nancial debts 1 3 4 4 (long term) Sub-total 48 40 39 23 19 121 242 200 Short-term borrowings 114 and overdrafts At December 31, 2011 162 40 39 23 19 121 242 200 At December 31, 2010 259 29 23 16 13 119 200 200 Short-term portion of long-term debt 48 50

BREAKDOWN OF FINANCIAL DEBT BY TYPE OF CURRENCY

Euro USD (1) GBP (1) Other (1) Total Long-term December 2011 105 21 79 37 242 Short-term December 2011 24 23 10 105 162 Long-term December 2010 94 2 75 29 200 Short-term December 2010 91 13 10 145 259

(1) Equivalent in euros.

CONFIRMED/DRAWN CREDIT LINES

Conﬁ rmed credit lines – Maturity Drawn credit lines – Maturity

Less than 1 to 5 years Beyond Total Less than 1 to 5 years Beyond Total 1 year 1 year Credit lines 51 1,501 138 1,690 48 121 121 290 Letters of credit Total 51 1,501 138 1,690 48 121 121 290

88 Colas Group Consolidated ﬁ nancial statements INTEREST RATES RISKS At December 31, 2011, a breakdown of financial assets and liabilities by nature of interest rate shows the following:

Floating rates Fixed rates Total Financial assets: −Cash and cash equivalents 446 446 Financial liabilities: −Borrowings (1) (242) (62) (304) −Bank overdrafts (114) (114) Net position before cash management 90 (62) 28 Interest rates hedging 166 (166) Net position after cash management 256 (228) 28 Seasonality adjustment (2) (734) Position after cash management and seasonality adjustment (478)

Consequently, an immediate increase of 1% in interest rates on the short-term net position above would cause an increase in ﬁ nancial expenses of 4.8 million euros in a full year.

Note 9 – Changes in net ﬁ nancial position

CHANGES IN NET FINANCIAL POSITION

31/12/2011 2011 variations 31/12/2010 Cash and cash equivalents 446 35 411 Bank overdrafts and short-term loans (114) 95 (209) Net cash 332 130 202 Long-term fi nancial debts 242 42 200 Long-term fi nancial debts (current portion) 48 (2) 50 Financial instruments 14 5 9 Gross debt 304 45 259 Net fi nancial position 28 85 (57)

MAIN TRANSACTIONS

Net ﬁ nancial position at December 31, 2010 (57) Financial acquisition/disposals (1) (60) Dividends paid (209) Share capital increase/decrease (3) Change in scope of consolidation, exchange di! erences and other (17) Operating 374 Net ﬁ nancial position asset (liability) at December 31, 2011 28

(1) Of which 13 million euros for acquisitions of assets.

Note 10 – Other current liabilities

31/12/2011 31/12/2010 Sta! , social welfare, States 928 837 Deferred incomes 27 34 Other non-ﬁ nancial debts 720 637 Total other debts 1,675 1,508

Consolidated ﬁ nancial statements Colas Group 89 Note 11 – Income from ordinary activities

BREAKDOWN BY NATURE OF INCOME

2011 2010 Revenue 2,242 1,934 Rendering of services 338 334 Construction contracts 9,832 9,393 Other income from ordinary activities –– Total income from ordinary activities 12,412 11,661

INFORMATION REGARDING CONSTRUCTION CONTRACTS

Works to be invoiced 402 375 Retentions for warranties 98 53 Works invoiced in advance (316) (321) Payments received in advance (104) (107)

Note 12 – Other operating income and expenses

DETAIL OF OTHER OPERATING INCOME AND EXPENSES

2011 2010 Proﬁ ts allocated or losses transferred regarding unconsolidated joint ventures 39 40 Proceeds on disposal of non-current assets 127 62 Reversal of unused provisions and depreciations 107 114 Other current income (1) 378 352 Other operating income 651 568 Losses allocated or proﬁ ts transferred regarding unconsolidated joint ventures (18) (22) Net book value of non-current assets disposed (60) (23) Other current expenses (69) (88) Other operating expense (147) (133)

(1) Mainly expenses invoiced back to associates in joint ventures.

Other non-current income – 6 Other non-current income (2) – 6 Other non-current expenses – (58) Other non-current expenses (3) – (58)

(2) Other non-current income: – badwill on minority interests shares purchase. (3) Other non-current expenses: – antitrust ﬁ nes and related litigations (31) million euros; – impairment of goodwill (27) million euros.

90 Colas Group Consolidated ﬁ nancial statements INCOME STATEMENT BY FUNCTION In addition to the income statement presented by nature, the income statement by function is disclosed hereunder:

2011 2010 Revenue 12,412 11,661 Cost of sales (10,857) (10,235) Gross profi t 1,555 1,426 Research and development costs (69) (69) Administrative expenses (1,020) (992) Profi t from operations (current) 466 365 Extraordinary items (52) Profi t from operations 466 313 Net fi nancial debt costs (24) (30) Other fi nancial income and expense 3 (7) Provision for income taxes (163) (122) Income from associates 59 69 Profi t for the year 341 223 Of which: Minority interest 5 (1) Of which: Equity holders of the parent 336 224

Note 13 – Finance income and expense

INTEREST INCOME AND EXPENSE

2011 2010 Interest income from cash 19 19 Income from short-term deposits 3 1 Interest income 22 20 Interest expense on cash (22) (25) Interest on ﬁ nance leases (1) (2) Interest on ﬁ nancial debt (23) (23) Interest expense (46) (50) Interest income and expense (24) (30)

OTHER FINANCIAL INCOME AND EXPENSE

2011 2010 Dividends received from unconsolidated investments 3 3 Release of fi nancial provisions 11 4 Proceeds on disposal of fi nancial assets 2 1 Other income 2 1 Other fi nancial income 18 9 Net charge on fi nancial provisions (4) (11) Net book value of fi nancial assets disposed (4) Other expense (11) (1) Other fi nancial expense (15) (16) Other net fi nancial income and expense 3 (7)

Consolidated ﬁ nancial statements Colas Group 91 Note 14 – Income tax

BREAKDOWN

2011 2010 Current income tax (164) (123) Deferred income tax 9 6 Tax adjustments or exemptions 4 (1) Withholding taxes on dividends (4) (3) Tax expense (155) (121) Tax provisions allocations/reversals (8) (1) Net tax expense (163) (122)

RECONCILIATION BETWEEN THEORETICAL TAX AND ACTUAL TAX EXPENSE Di! erences between theoretical tax expenses, determined at the French statutory tax rate, and e! ective income tax are as follows:

2011 2010 Theoretical income tax determined at statutory tax rate (153) (95) Impact of di! erent tax rates of subsidiaries operating in other jurisdictions 24 (11) Recognition of tax assets not previously recognized 10 Unrecognized tax losses (1) (11) (34) Income taxes which are not linked to income (7) Impact of expenses that are not deductible and incomes that are not taxable (16) 8 in determining taxable proﬁ t Income tax reported in income statement (163) (122)

(1) Not reversible in a foreseeable future.

Note 15 – Earnings and dividends per share Basic earnings per share are determined by dividing net proﬁ t for the year (Group share) by the total number of shares outstanding at December 31, less the number of bought back shares expected to be written o! .

2011 2010 Net proﬁ t (Group share) (in euros) 335,789,000 223,839,000 Number of issued shares 32,654,499 32,624,790 Basic earnings per share (in euros) 10.28 6.86

Diluted earnings per share is determined by dividing net proﬁ t for the year (Group share) by the total number of shares outstanding at December 31, 2011, plus the number of outstanding stock options. Because there are no outstanding stock options, diluted earnings per share are identical to basic earnings per share.

Diluted earnings per share (in euros) 10.28 6.86

in euros Per share Total Dividends decided and paid in 2011 6.30 205,536,177.00 Dividends submitted to approval of the General Meeting of Shareholders on April 17, 2012 (1) 7.26 237,071,662.74 (not recognized as liabilities at December 31, 2011)

(1) If approved by the Board of Directors.

92 Colas Group Consolidated ﬁ nancial statements Note 16 – Segment reporting IFRS 8 requires operating segment deﬁ nition based on internal reporting reviewed by the entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and to assess its performance.

DETERMINATION OF GROUP’S SEGMENTS The Group’s operating activities are organized as follows:

Roads France and Specialized road-related activities General Management Division Includes: −the road business in mainland France; −specialized road-related activities for France and elsewhere around the world: signaling and safety, pipes and mains, waterprooﬁ ng and railways).

Europe General Management Division Includes the Group’s activities in Europe (excluding France) except for signaling, pipes, mains, waterprooﬁ ng and railways.

North America General Management Division Includes the Group’s activities in the United States and Canada.

International General Management Division Includes the Group’s activities in Africa, North Africa, Indian Ocean, French overseas departments and territories, Asia and Middle-East.

Holding Includes the activity of Colas’ corporate head o$ ce and the sales of reﬁ ned oil products other than bitumen (base oils, para$ n and fuels).

RECONCILIATION Internal reporting and accounting figures are identical; consequently no reconciliation schedule has been disclosed.

Consolidated ﬁ nancial statements Colas Group 93 BUSINESS SEGMENT INFORMATION

Roads France Europe North America International Holding Consoli- & Specialized Management Management Management dated road related Division Division Division Year 2011 Income from ordinary activities 6,948 1,478 2,348 1,295 343 12,412 Income before depreciation 434 60 243 122 68 927 Depreciation (239) (53) (94) (57) (18) (461) Profi t from operations (current) 195 7 149 65 50 466 Extraordinary items Profi t from operations 195 7 149 65 50 466 Interest income (expense) (8) (9) (3) (7) 3 (24) Other fi nancial income and costs 2 1 3 Provision for income taxes (75) (13) (49) (19) (7) (163) Income from associates 2 3 5 49 59 Profi t for the year 116 (12) 97 44 96 341 Segment assets 3,089 1,166 1,276 1,272 1,452 8,255 Segment liabilities 2,264 923 627 886 1,027 5,727 Current investments (240) (15) (106) (54) 22 (393)

Year 2010 Income from ordinary activities 6,457 1,589 2,208 1,250 157 11,661 Income before depreciation 439 (33) 255 137 37 835 Depreciation (249) (55) (92) (59) (15) (470) Profi t from operations (current) 190 (88) 163 78 22 365 Extraordinary items (37) (21) 6 (52) Profi t from operations 153 (109) 163 84 22 313 Interest income (expense) (11) (11) (1) (6) (1) (30) Other fi nancial income and costs (7) (7) Provision for income taxes (51) 9 (52) (18) (10) (122) Income from associates 1 3 13 52 69 Profi t for the year 85 (108) 110 73 63 223 Segment assets 2,790 1,247 1,150 1,178 1,311 7,676 Segment liabilities 2,040 1,029 529 837 866 5,301 Current investments (218) (33) (135) (48) (18) (452)

INFORMATION REGARDING MAIN CLIENTS

France International Total States, public companies and local authorities 60% 72% 64% Private companies and individuals 40% 28% 36%

GEOGRAPHICAL SEGMENT INFORMATION Due to the manner in which the Group’s operations are organized, the information by geographical segments disclosed hereafter is very similar to the information posted above in the business segment section. The di! erences are as follows: −in the business segment section, French overseas departments are posted in the International General Management but they are posted in France in the geographical segment section; −in the business segment section, specialized road-related activities performed in International territories (safety, waterprooﬁ ng, mains, railways) are posted in France but they are posted according to their location in the geographical segment section.

94 Colas Group Consolidated ﬁ nancial statements Revenue by geographical segments

France Europe North Rest Consolidated % (excl. France) America of the world Year 2011 Roads – works and sales of construction 5,199 1,241 2,153 819 9,412 76 materials Civil engineering, pipes and mains 323 235 180 20 758 6 Waterprooﬁ ng 624 20 2 13 659 5 Safety and signaling 299 26 11 9 345 3 Building 255 15 4 30 304 2 Railways 356 198 44 598 5 Sales of reﬁ ned oil products 194 125 6 11 336 3 Total 7,250 1,860 2,356 946 12,412 100

Year 2010 (1) Roads – works and sales of construction 4,811 1,323 2,024 734 8,892 77 materials Civil engineering, pipes and mains 324 258 167 52 801 7 Waterprooﬁ ng 553 20 3 9 585 5 Safety and signaling 282 26 12 8 328 3 Building 270 44 5 26 345 3 Railways 339 170 49 558 4 Sales of reﬁ ned oil products 135 17 152 1 Total 6,714 1,858 2,211 878 11,661 100

(1) Mayotte ﬁ gures have been reclassiﬁ ed in France.

Assets and liabilities by geographical segments

France Europe North Rest Consolidated (excl. France) America of the world At December 31, 2011 Non-current assets 2,256 572 719 334 3,881 Current assets 2,372 825 558 619 4,374 Total assets 4,628 1,397 1,277 953 8,255 Non-current liabilities 626 268 142 66 1,102 Current liabilities 2,725 824 486 590 4,625 Total liabilities 3,351 1,092 628 656 5,727 Net assets 1,277 305 649 297 2,528

At December 31, 2010 (1) Non-current assets 2 , 2 1 1 590 672 231 3,704 Current assets 2,059 867 479 567 3,972 Total assets 4,270 1,457 1,151 798 7,676 Non-current liabilities 667 222 99 57 1,045 Current liabilities 2,338 957 431 530 4,256 Total liabilities 3,005 1,179 530 587 5,301 Net assets 1,265 278 621 211 2,375

(1) Mayotte ﬁ gures have been reclassiﬁ ed in France.

Consolidated ﬁ nancial statements Colas Group 95 Note 17 – Financial instruments We disclose, hereafter, the total of all notional amounts outstanding at December 31, 2011 for each type of ﬁ nancial instrument, with breakdown by maturity for interest transactions, and by currency for currency trade.

HEDGING OF INTEREST RATE RISKS

Interest rate swap Maturity Total Total

2012 2013 to 2016 Beyond 12/31/2011 12/31/2010 On ﬁ nancial assets ––––– On ﬁ nancial liabilities – 30 207 237 150

HEDGING FOR EXCHANGE RISKS Group companies generate only a small proportion of their revenue from exports. Revenue from foreign countries is chieﬂ y generated by subsidiaries that issue invoices and book their expenses in local currency. Occasionally, some currency contracts are hedged for exchange risks.

HUF (1) AUD (1) USD (1) GBP (1) Other (1) 31/12/2011 31/12/2010 Forward purchases 7 3 10 14 Forward sales – 33 35 13 19 100 75 Currency swap – – – – – – – Currency options – – – – – – –

(1) Equivalent in euros.

HEDGING FOR COMMODITIES RISKS

Brent Fuels 31/12/2011 31/12/2010 Forward purchases – 5 5 – Forward sales 11 1 12 4 Swaps –––– Options – 5 5 –

Forward sales of Brent contracts and fuels correspond to hedging for activity at SRD, Société de la Ra$ nerie de Dunkerque. At December 31, 2011, this hedging represented an amount of 132,000 barrels of Brent and 1,200 tons of 1% fuel oil sold forward for a notional value of 12 million euros. The cash ﬂ ow hedge as of December 31, 2011 was valued at (0.1) million euros and will have negligible impact on other comprehensive income.

FAIR VALUE OF HEDGING FINANCIAL INSTRUMENTS At December 31, 2011, the net present market value of hedging fi nancial instruments amounted to (33) million euros. This amount mainly comprises the net present value of interest rate swap for Group debt hedging. Breakdown of the market value by nature of hedging is as follows: −transactions regarding fair value hedge: (18) million euros; −transactions regarding cash fl ow hedge: (15) million euros; −trading transactions: none. In case of +1% transfer in interest rate yield curve (and respectively –1%), the market value of hedging fi nancial instruments would amount to (19.9) million euros (respectively (47.8) million euros). An average unfavorable change of 1% against all other currencies would result in a decrease in the market value of hedging fi nancial instruments to (34.5) million euros. Should commodities prices fl uctuate by +10% (and respectively –10%), the market value of fi nancial instruments would amount to (34.0) million euros (respectively (32.6) million euros). Measurement has been made by an independent service provider, according to market practices.

96 Colas Group Consolidated ﬁ nancial statements Note 18 – Commitments and contingencies

COMMITMENTS AND CONTINGENCIES

Maturity Less than 1 year From 1 to More than Total Total 5 years 5 years 31/12/2011 31/12/2010 Commitments given Endorsements and warranties 38 30 6 74 67 Commitments received Contractual commitments ––––– Assets given as securities Mortgages and securities 13 45 46 104 98

The presentation of the commitments above includes all signiﬁ cant commitments, according to all currently applicable accounting rules.

OPERATING LEASE COMMITMENTS

Maturity Less than 1 year From 1 to More than Total Total 5 years 5 years 31/12/2011 31/12/2010 Commitments given/received 34 92 56 182 165

Minimum lease payments up to contracts renewal date (or ﬁ rst cancel date) pertain to operating lease contracts for operating businesses (land building, equipment, etc.).

COMMITMENTS UNDER FINANCE LEASES

Maturity Less than 1 year From 1 to More than Total 5 years 5 years Minimum lease payments 11 24 3 38 Finance charge (2) (3) (5) Present value of minimum lease payments 9 21 3 33 At December 31, 2010 16 22 2 40

OTHER COMMITMENTS In 2011, the Company issued guarantees under section 17 of Ireland’s Companies (Amendment) Act, 1986 of Ireland on behalf of Colas Teoranta, Road Maintenance Services Ltd, Colas Building Products Ltd, Cold Chon (Galway) Ltd, Colﬁ x (Dublin) Ltd, Colas Construction Ltd, Road Binders Ltd, Chemoran Ltd and Atlantic Bitumen Company Ltd.

Note 19 – Workforce and employee beneﬁ ts

AVERAGE GROUP WORKFORCE

2011 2010 Managers and engineers 7,697 7,784 Foremen, technicians, supervisors and o$ ce sta! 15,960 16,099 Workers 42,545 45,012 Total average Group workforce 66,202 68,895

BREAKDOWN OF EMPLOYEE BENEFITS: DEFINED CONTRIBUTION PLANS

2011 2010 Amounts recognized as expense 801 757

These expenses comprise contributions to: −social security, welfare; −retirement pension funds (State and supplementary); −unemployment insurance schemes.

Consolidated ﬁ nancial statements Colas Group 97 BREAKDOWN OF EMPLOYEE BENEFITS: DEFINED BENEFIT PLANS

Retirement indemnities Pensions (1)

2011 2010 2011 2010 Current service costs (1) (13) (1) (4) Interest costs 7 7 11 11 Expected return on plan assets (11) (11) Past service costs 2 2 (1) (15) Net expenses 8 (4) (2) (19) Present value of obligations 157 168 325 311 Fair value of plan assets (277) (258) Unrecognized past service costs (22) (24) 2 2 Net recognized liabilities 135 144 50 55

(1) These pension schemes are managed by independent funds.

VARIATIONS OF BALANCE SHEET NET LIABILITIES

Retirement indemnities Pensions

2011 2010 2011 2010 At January 1 144 147 55 38 Exchange di! erences 1 1 Transfers 1 (6) Acquisitions of subsidiaries 4 15 Actuarial gains/losses in equity (17) (4) 2 20 Net expenses 8 (4) (2) (19) At December 31 135 144 50 55

MAIN ACTUARIAL ASSUMPTIONS FOR DETERMINATION OF RETIREMENT INDEMNITIES The e! ect of changes in assumptions determined at 2011 balance sheet date has been recognized directly through equity, according to Group accounting policies (IAS 19 revised).

2011 2010 Discount rates IBoxx € Corporate A10 (1) 5.46% 4.62% Survival tables Insee 2006-2008 Insee 2006-2008 Average retirement age for managers and executives 65 years 65 years Average retirement age for other employees and workers 63 years 63 years Projected salaries increase 4.00% 4.00%

(1) A drop of 0.5% of the discount would rate an increase in commitments of 10 millio euros. According to Group accounting principles, the actuarial gain/loss would be recognized as other income and expenses.

EQUITY COMPENSATION BENEFITS In 2011, options giving subscription rights for new Bouygues shares have been granted by Bouygues to certain Colas and Group subsidiary employees. The amount of these beneﬁ ts is not signiﬁ cant.

Note 20 – Related party disclosures

RELATED PARTIES IDENTITY Bouygues Group companies: Bouygues and its subsidiaries and associates companies. Joint ventures: Carrières Roy and certain non-signifi cant joint ventures. Associates: Cofi route, Tipco Asphalt, Mak and certain non-signifi cant associates. Other related parties: Colas Foundation, and certain non-consolidated companies.

98 Colas Group Consolidated ﬁ nancial statements DETAILS OF RELATED PARTY DISCLOSURES

Expense Income Receivables Debts

2011 2010 2011 2010 2011 2010 2011 2010 Bouygues Group companies 56 47 114 68 50 61 17 15 Joint ventures 18 18 38 47 15 12 11 10 Associates 7 74 49 4 4 3 Other related parties 20 27 15 17 6 8 3 6 Total 101 92 241 181 75 85 34 31 Maturity < 1 year 75 85 32 29 Maturity > 1 year – – 2 2

The application of amended IAS 24 with e! ect as of January 1, 2011, led Colas to further complete the information provided above, mainly involving transactions with the company Alstom (associated with Bouygues Company). Other non-signiﬁ cant changes involve operations with non-consolidated companies. The 2010 ﬁ gures have been re-calculated.

COMPENSATION OF KEY MANAGEMENT OF THE GROUP Key managers are members of the executive committee at December 31, 2011. It comprises the Chairman and Chief Executive O$ cer and six salaried members (including four salaried Directors)

2011 2010 Direct compensation 6.9 6.4 Post-employment beneﬁ ts 0.4 0.4 Equity compensation beneﬁ ts –– Total 7.3 6.8

Direct compensation This amounts to 6.9 million euros, of which 3.4 million euros is for variable compensation established in relation to performance realized in 2011 and 140,000 euros for Directors’ fees.

Post-employment beneﬁ ts Chairman and Chief Executive O$ cer: this provides a supplementary pension plan amounting to 0.92% of reference salary for each year of service in the scheme whose ceiling is eight times that of French Social Security. The supplementary pension scheme has been externalized to an insurance company. Other key managers: Company’s contribution regarding deﬁ ned pension contribution plan (4% of employees’ global wages).

Equity compensation beneﬁ ts The amount of the beneﬁ t linked to Bouygues shares 2011 attribution is not material.

Directors’ fees Directors’ fees allocated to Directors in 2011 amounted to 240,000 euros.

Consolidated ﬁ nancial statements Colas Group 99 Note 21 – Fees of independent Auditors We disclose hereunder the fees charged by the Auditors and members of their network who carry out the legal audit of Colas consolidated accounts and subsidiaries subject to global integration.

Mazars KPMG

2011 2010 2011 2010 Colas parent company’s legal Auditors −Colas 0.2 0.2 0.2 0.2 −Subsidiaries 1.9 1.8 2.2 2.1 −Secondary assignments Sub-total 2.1 2.0 2.4 2.3 Other assignments: law, tax, welfare 0.7 Total 2.1 2.0 3.1 2.3

Note 22 – Main exchange rates used for translation Convention : 1 euro = x local monetary units.

Country Currency Rate 31/12/2011 Average rate 2011 Rate 31/12/2010 Average rate 2010 Europe Croatia Croatian kuna 7.5370 7.4492 7.3830 7.2949 Denmark Danish kroner 7.4342 7.4496 7.4535 7.4477 Great Britain British pound 0.8353 0.8713 0.8608 0.8560 Hungary Forint 314.58 280.67 277.95 276.51 Poland Zloty 4.4580 4.1380 3.9750 4.0049 Czech Republic Czech Republic 25.787 24.600 25.061 25.263 koruny Romania New leu 4.3233 4.2399 4.2620 4.2169 Switzerland Swiss franc 1.2156 1.2318 1.2504 1.3700 North America United States US dollar 1.2939 1.4000 1.3362 1.3207 Canada Canadian dollar 1.3215 1.3805 1.3322 1.3660 Other Australia Australian dollar 1.2723 1.3435 1.3136 1.4390 Morocco Dirham 11.1095 11.2605 11.1735 11.1453 Thailand Baht 40.9910 42.7719 40.1700 41.8175

Note 23 – Scope of consolidation

23.1 – CHANGES IN SCOPE OF CONSOLIDATION

Number of consolidated companies 2011 2010 Full consolidation 528 530 Proportional consolidation 86 97 Equity method 19 18 Total 633 645

Main new investments France: Godet, Ateliers des Flandres. International: Gamma Materials (Mauritius). Disposal of companies Tubobel (Belgium). Change in consolidation method AME: change from proportionate method to full integration method.

100 Colas Group Consolidated ﬁ nancial statements 23.2 – IMPACT AND ACCOUNTING OF YEAR’S ACQUISITIONS We have disclosed hereafter the changes in scope of consolidation before acquisition and after allocation of identiﬁ able assets and liabilities to di! erent balance sheet items.

Impact on balance sheet

Amounts before Goodwill Fair value acquisition allocation (1) of items acquired Tangible assets 12 28 40 Intangible assets 4 4 Goodwill 3 3 Current assets 8 8 Total assets 20 35 55 Capital and reserves 5 33 38 Minority interests 1 1 Tax liabilities 1 1 Other non-current liabilities 5 5 Current liabilities 9 1 10 Total liabilities 20 35 55

Impact on revenue 14

(1) Temporary allocation potentially amendable within one year following acquisition date.

Amendments in 2011 (within one year period) of temporary allocations made in 2010: none. Investment price in consolidated companies acquired during the year totaled 37 million euros. Additionally, 2 million euros were paid for companies acquired in 2010, but consolidated in 2011. After deduction of an option for an amount of 1 million euros, the fair value of acquired assets and liabilities totals 38 million euros and corresponds to the acquisition price.

Consolidated ﬁ nancial statements Colas Group 101 23.3 – LIST OF MAIN CONSOLIDATED COMPANIES The following companies are fully consolidated except in case of speciﬁ c disclosure (PC: proportional consolidation, EM: equity method).

Companies Head o$ ce % of stake

2011 2010 France Colas Centre-Ouest Nantes, France 99.9 99.9 Colas Île-de-France – Normandie Magny-les-Hameaux, France 99.9 99.9 Colas Nord-Picardie Villeneuve-d’Ascq, France 99.9 99.9 Colas Est Nancy, France 99.9 99.9 Colas Rhône-Alpes – Auvergne Lyon, France 99.9 99.9 Colas Midi-Méditerranée Aix-en-Provence, France 99.9 99.9 Colas Sud-Ouest Mérignac, France 99.9 99.9 Aximum Chatou, France 99.9 99.9 Spac Clichy, France 99.9 99.9 Sacer Atlantique Nantes, France 99.9 99.9 Sacer Paris – Nord-Est Magny-les-Hameaux, France 99.9 99.9 Sacer Sud-Est Lyon, France 99.9 99.9 Screg Ouest Nantes, France 99.9 99.9 Screg Île-de-France – Normandie Voisins-le-Bretonneux, France 99.9 99.9 Screg Nord-Picardie Villeneuve-d’Ascq, France 99.9 99.9 Screg Est Nancy, France 99.9 99.9 Screg Sud-Est Lyon, France 99.9 99.9 Screg Sud-Ouest Mérignac, France 99.9 99.9 Smac Boulogne-Billancourt, France 99.9 99.9 Colas Rail Maisons-La$ tte, France 99.9 99.9 GTOI Le Port – Reunion Island 99.9 99.9 Colas Mayotte Mamoudzou – Mayotte 100.0 100.0 Colas Martinique Le Lamentin – Martinique 99.9 99.9 Gouyer Le Lamentin – Martinique 99.9 99.9 Colas Guadeloupe Baie-Mahault – Guadeloupe 99.9 99.9 SBEG Cayenne – French Guiana 99.9 99.9 Carrières Roy (PC) Saint-Varent, France 49.9 49.9 Coﬁ route (EM) Sèvres, France 16.7 16.7 Société de la Ra$ nerie de Dunkerque Dunkerque, France 100.0 100.0 French overseas territories Colas de Nouvelle-Calédonie Noumea – New Caledonia 99.9 99.9 Europe (excluding France) Colas Bauchemie GmbH Bremen – Germany 100.0 100.0 Colas GmbH Gratkorn – Austrian 100.0 100.0 Colas Belgium Brussels – Belgium 99.9 99.9 Cesta Varazdin Varazdin – Croatia 100.0 70.3 Colas Danmark A/S Virum – Denmark 100.0 100.0 Colas Ltd Rowfant – Great Britain 100.0 100.0 Colas Hungaria Budapest – Hungary 100.0 100.0 Colas Polska Sroda Wlkp – Poland 100.0 100.0 Colas CZ Prague – Czech Republic 99.1 99.1 Colas Teoranta Dublin – Ireland 100.0 100.0 Colas Romania Bucharest – Romania 100.0 100.0 Colas SA Lausanne – Switzerland 99.2 99.2

102 Colas Group Consolidated ﬁ nancial statements Companies Head o$ ce % of stake

2011 2010 North America ColasCanada Inc. Montréal – Quebec, Canada 100.0 100.0 Colas Inc. Morristown – New Jersey, United States 100.0 100.0 Africa – Indian Ocean Colas Afrique Cotonou – Benin 100.0 100.0 Colas Djibouti Djibouti – Republic of Djibouti 100.0 100.0 Colas Gabon Libreville – Gabon 89.9 89.9 Colas Madagascar Antananarivo – Madagascar 100.0 100.0 Colas (Maurice) Ltée Petite Rivière – Mauritius 100.0 100.0 Gamma Materials (PC) Beau Bassin – Mauritius 49.9 – Colas du Maroc Casablanca – Morocco 100.0 100.0 Grands Travaux Routiers Rabat – Morocco 67.7 67.7 Asia Wasco Jakarta – Indonesia 55.1 55.1 Raycol Asphalt Co. Ltd (PC) Rayong – Thailand 50.0 50.0 Thaï Slurry Seal Co. Ltd Bangkok – Thailand 50.0 50.0 Tipco Asphalt (EM) Bangkok – Thailand 32.1 30.7 Hincol (PC) Mumbai – India 30.0 30.0 Drawmac Group Sydney – Australia 93.8 93.8

Consolidated ﬁ nancial statements Colas Group 103 Report of the Statutory Auditors on the consolidated ﬁ nancial statements

(Fiscal year ended December 31, 2011)

To the Shareholders, – the Company systematically, at least once per year, performs impairment tests on its goodwill and assets In compliance with the assignment entrusted to us by with indefi nite useful economic lives and determines your Shareholders’ Meeting, we hereby present our whether there is any indication of impairment of its report for the fiscal year ended December 31, 2011 non-current assets, as described more fully in note dealing with: 2 in the section entitled “Non-current assets – 5. – the audit of the consolidated fi nancial statements of Monitoring the value of fixed assets” and note 3.3 Colas attached to this report; “Goodwill and other intangible assets” of the notes – the justifi cation of our assessments; to the financial statements. We have examined the – the specifi c verifi cation provided for by law. assumptions made and methods employed in per- The consolidated fi nancial statements are the respon- forming that impairment testing and have verifi ed that sibility of the Board of Directors. Our responsibility is the abovementioned notes provide the appropriate to express an opinion on those fi nancial statements on information; the basis of our audit. – Colas recognizes the profi t or loss of its construction projects on the basis described in note 2 in the section 1 – OPINION ON THE CONSOLIDATED “Income statement – 1. Current operating profi t”. Our FINANCIAL STATEMENTS work consisted, based on the information provided We conducted our audit in accordance with the audit- to us, in assessing the assumptions employed in fore- ing standards applicable in France; such standards casting the fi nal profi t or loss on project completion. require us to perform such audit procedures as may The above assessments were made in the context provide us with reasonable assurance that the con- of our audit of the consolidated fi nancial statements solidated fi nancial statements are free from material taken as a whole and therefore contributed to the misstatement. An audit includes examination, on a test formation of the audit opinion expressed in the fi rst basis by sampling or other means of selection, of evi- part of this report. dence relevant to the amounts and disclosures in the fi nancial statements. It also includes an assessment of 3 – SPECIFIC VERIFICATION the accounting policies applied, of the signifi cant estimates made in the preparation of the fi nancial state- We have also verifi ed the information presented in the ments, and of their overall presentation. We consider Group’s management report, in accordance with pro- that the work we performed provides a su$ cient and fessional standards applicable in France. appropriate basis for the opinion. We have no matters to report regarding its fair pres- We certify that the consolidated fi nancial statements entation and conformity with the consolidated fi nan- are properly and faithfully prepared with regard to cial statements. the IFRS accounting framework as adopted by the Paris-La Défense and Courbevoie, February 27, 2012 European Union and give a true and fair view of consolidated entities’ assets and liabilities, fi nancial posi- The Statutory Auditors tion and fi nancial performance. KPMG Audit MAZARS A division of KPMG SA 2 – JUSTIFICATION OF OUR ASSESSMENTS Xavier Fournet Gilles Rainaut Gaël Lamant In accordance with the requirements of article Partner Partner Partner L. 823-9 of the French Code of Commerce, relating to the justifi cation of our audit assessments, we bring to your attention the following matters:

104 Colas Group Report of the Statutory Auditors 106 BALANCE SHEET AT DECEMBER 31 107 INCOME STATEMENT 108 NOTES TO THE COLAS FINANCIAL STATEMENTS 1 1 8 RESULTS OF THE COMPANY FOR THE LAST FIVE FISCAL YEARS

Colas ﬁ nancial statements at December 31, 2011

Colas Group 105 Balance sheet at December 31

in millions of euros Notes 2011 2010 Intangible assets 17.4 17.7 Property. plant and equipment 157.1 170.5 Holdings in subsidiaries and a$ liates 1,294.8 1,216.8 Loans and advances to subsidiaries and a$ liates 315.0 242.2 Other non-current ﬁ nancial assets 2.1 1.9 Non-current assets 3 1,786.4 1,649.1 Inventories 80.9 49.8 Trade receivables 114.2 102.3 Group and associates 138.9 128.5 Other receivables and prepayments 17.5 36.5 Cash and cash equivalents 31.6 34.5 Current assets 4 383.1 351.6 Total assets 2,169.5 2,000.7

Share capital 49.0 48.9 Share premium and reserves 875.8 809.7 Net proﬁ t for the year 324.6 267.4 Tax-driven provisions 11.3 10.4 Equity 5 1,260.7 1,136.4 Provisions for contingencies and losses 6 39.7 84.7 Financial debt – 0.7 Advance payments – 0.7 Trade payables 107.2 86.4 Group and associates 668.5 584.4 Other non-ﬁ nancial debt, accruals and deferred income 9 78.4 62.9 Bank overdrafts and short-term loans 15.0 44.5 Liabilities 869.1 779.6 Total equity and liabilities 2,169.5 2,000.7

106 Colas Group Colas ﬁ nancial statements Income statement

in millions of euros Notes 2011 2010 Revenue 10 757.4 576.7 Raw materials and consumables used (506.9) (375.9) External services (151.0) (122.8) Sta! costs (60.7) (59.7) Taxes other than income tax (9.2) (10.7) Depreciation, amortization and depletion (10.8) (10.4) Net provision allocations (5.3) (0.7) Other operating income 84.9 106.6 Other operating expenses (2.1) (2.2) Share of profi ts from joint ventures 1.1 1.0 Operating profi t 108.0 101.9 Financial income 321.0 289.2 Financial expense (109.6) (113.1) Interest income (expense) 11 211.4 176.1 Profi t from operations 319.4 278.0 Exceptional income 60.1 11.4 Exceptional expense (26.5) (7.2) Exceptional income (expense) 12 33.6 4.2 Employee profi t sharing scheme (1.7) (1.4) Income taxes 13 (26.7) (13.4) Net profi t for the year 324.6 267.4

Colas ﬁ nancial statements Colas Group 107 Notes to the ﬁ nancial statements of Colas

Contents

1 Information about the Company 10 Breakdown of revenue

2 Summary of accounting policies 11 Financial income (expense)

3 Non-current assets 12 Exceptional income (expense)

4 Current assets 13 Income taxes

5 Equity 14 Impact of derogatory tax-driven provisions on proﬁ t 6 Provisions for contingencies and losses 15 O& -balance sheet commitments 7 Breakdown of accounts involving related companies 16 Workforce and remuneration of executive bodies 8 Receivables and payables by maturity at the balance sheet date 17 Fees paid to the Statutory Auditors

9 Other non-ﬁ nancial debt, accruals 18 Subsidiaries and a# liates and deferred income 19 List of subsidiaries, a# liates and marketable securities

The ﬁ gures in the notes to the ﬁ nancial statements are presented in millions of euros (€m) unless otherwise stated.

108 Colas Group Colas fi nancial statements Note 1 – Information about Other non-current fi nancial assets are carried at face the Company value net of any impairment. The fi nancial statements of Colas for the year ended INVENTORIES December 31, 2011 were approved by the Board of Inventories are measured at the lower of their cost Directors and authorized for issue on February 27, and net realizable value. 2012. Inventory costs include all purchase costs and costs Colas is a French public société anonyme company of conversion. incorporated in France. Costs of purchase include the purchase price, import Its main activities are described in note 10. duties and other non-recoverable taxes, transport and handling costs incurred to bring the inventories to their current location. Note 2 – Summary of accounting Costs of conversion include all costs that are directly or indirectly incurred in converting raw materials into policies fi nished goods. For future valuations costs are assigned using the PREPARATION OF THE FINANCIAL first-in first-out or weighted average cost formulas, STATEMENTS according to the type of inventories. Colas’ financial statements have been prepared in Net realizable value is the estimated selling price less accordance with current French legal and regulatory estimated costs of completion and estimated costs provisions. necessary to complete the sale.

FOREIGN CURRENCY TRANSLATION TRADE RECEIVABLES AND OTHER RECEIVABLES Transactions denominated in foreign currency are recognized at the exchange rate prevailing at the transac- Trade receivables, which generally have 30-90 day tion date. Monetary assets and liabilities denominated terms, are recognized and carried at their original in foreign currency are translated at the exchange rate invoice amount less an allowance for any uncollectible prevailing at the balance sheet date. amounts. Trade receivables include unbilled revenue on work INTANGIBLE ASSETS performed for which customers have not yet been invoiced. Intangible assets are recognized at acquisition cost. Start-up and research costs are expensed as incurred. PREPAID EXPENSES AND ACCRUED INCOME Intangible assets consist chieﬂ y of patents and brands. Business goodwill is not amortized; an impairment These include among other items prepaid expenses charge may be recognized if economic circumstances and deferred tax assets recoverable in future account- so require. ing periods.

PROPERTY, PLANT AND EQUIPMENT CASH AND CASH EQUIVALENTS Property, plant and equipment are recognized at cost Cash and cash equivalents comprise cash at bank and less accumulated depreciation and any recognized in hand and short-term deposits with a maturity on impairment loss. inception of three months or less. Depreciation is charged so as to write off the cost Short-term deposits are stated at cost less accumu- of assets or components of assets with different lated impairment, if their net realizable value is lower estimated useful lives, over their estimated useful than cost. lives, using the straight-line method. Land is not depreciated. PROVISIONS FOR CONTINGENCIES AND LOSSES O$ ce buildings: 20 to 40 years Provisions are constituted when Colas has a current Industrial buildings: 10 to 20 years (legal or implicit) obligation arising from a past or Plant and equipment: 5 to 10 years current event and a cash disbursement is likely to be Other property and equipment 3 to 10 years required to settle the obligation. (cars. trucks and o$ ce equipment): PENSIONS AND EMPLOYEE BENEFITS

NON-CURRENT FINANCIAL ASSETS Commitments with regard to pensions payable to employees on retirement are covered by the regular Equity interests are stated on the balance sheet at payment of contributions to pension funds that are acquisition cost less any impairment deemed neces- independent from the Company. sary. determined based on their value-in-use. Acquisition costs have been carried as non-current assets since 2006.

Colas fi nancial statements Colas Group 109 − Retirement indemnities CAPITAL GAINS OR LOSSES ON DISPOSAL The cost of this employee benefi t is determined using OF ASSETS the Projected Unit Credit actuarial method. In accordance with the recommendations made in the Actuarial gains or losses are only recognized as chart of accounts of the French Public Works sector, income or expenses when their total exceeds 10% of the capital gains on recurring disposals of equipment the total commitment (the “corridor” method). and installations have been recognized under operat- Actuarial gains or losses are apportioned over the ing profi t. employees’ average residual working life. − Length-of-service awards INCOME TAX Provisions are booked in respect of length-of-service Deferred taxes are determined in accordance with awards, which the Company grants on an ongoing the balance sheet liability method for all the taxable and systematic basis. or deductible temporary differences at the balance An individual projection method is used to calculate sheet date. these amounts taking into consideration sta! turnover Taxable or deductible temporary di! erences include: and average life expectancy, according to mortality − all di! erences between the tax base of an asset or tables. The main actuarial assumptions used to calcu- liability and its carrying amount in the balance sheet; late vested pension benefi ts are: − carry-forwards of tax losses and unused tax credits.

2011 2010 When the net deferred tax balance is a tax asset, that asset is recognized only to the extent that it is highly Discount rate 5.46% 4.62% (IBoxx € corporate) probable that taxable proﬁ t will be available against these deductible temporary differences in future Average sta! Insee Insee accounting periods. turnover rate 2006-2008 2006-2008 Deferred tax assets or liabilities are measured on the Executive retirement age 65 years 65 years basis of tax rates expected to be applied during the Retirement age of clerical, 63 years 63 years year in which the asset will be realized or the liability technical and supervisory settled based on tax rates that have been enacted or sta! and site workers substantially enacted at the balance sheet date. Future salary increases 4% 4% CONSOLIDATION REVENUE As a member of the Bouygues Group, our Company’s results are included in the Bouygues Group’s consoli- Revenue represents the aggregate amount of sales dated ﬁ nancial statements. generated and works and services provided. Revenue from construction activities is recognized according to the percentage of completion method: − on the basis of work completed for contracts of less than one year; − on the basis of the latest estimate of the total contract price multiplied by the percentage completion for long-term contracts.

110 Colas Group Colas ﬁ nancial statements Note 3 – Non-current assets

January 1, 2011 Acquisitions Disposals Charges December 31, and reductions and reversals 2011 Intangible assets Gross 24.4 0.2 24.6 Amortization and impairment (6.7) (0.5) (7.2) Net 17.7 0.2 (0.5) 17.4 Tangible assets Gross 266.4 13.8 (30.4) 249.8 Depreciation and impairment (95.9) 3.2 (92.7) Net 170.5 13.8 (30.4) 3.2 157.1 Holdings in subsidiaries and a$ liates Gross 1,342.7 88.9 (10.0) 1,421.6 Impairment (125.9) (0.9) (126.8) Net 1,216.8 88.9 (10.0) (0.9) 1,294.8 Loans/advances to subsidiaries and a$ liates Gross 260.1 717.8 (614.5) 363.4 Impairment (17.9) (30.5) (48.4) Net 242.2 717.8 (614.5) (30.5) 315.0 Other non-current ﬁ nancial assets Gross 1.9 0.4 (0.2) 2.1 Impairment Net 1.9 0.4 (0.2) 2.1 Total non-current assets 1,649.1 821.1 (655.1) (28.7) 1,786.4

Note 4 – Current assets

Gross Impairment 2011 2010 Net Net Inventories 82.1 (1.2) 80.9 49.8 Trade receivables 120.5 (6.3) 114.2 102.3 Group and associates 147.8 (8.9) 138.9 128.5 Advances and down payments 0.8 0.8 3.2 Other receivables 9.0 9.0 26.7 Prepaid expenses 0.4 0.4 0.4 Accrued income 0.6 0.6 0.2 Deferred tax assets 6.7 6.7 6.0 Other receivables and regularization accounts 17.5 17.5 36.5 Marketable securities Bouygues Relais cash management company 20.0 20.0 30.0 Cash and cash equivalents 11.6 11.6 4.5 Marketable securities, cash and cash equivalents 31.6 31.6 34.5 Total current assets 399.5 (16.4) 383.1 351.6

Colas ﬁ nancial statements Colas Group 111 Note 5 – Equity

COMPOSITION OF THE SHARE CAPITAL Colas had share capital of 48,981,748.50 euros at December 31, 2011. It comprised 32,654,499 shares of 1.50 euros at par value, with all shares having the same rights (however, double voting rights are allocated to shares registered in the name of the same shareholder for more than two years).

YEAR VARIATIONS

Number of shares Amounts in euros At January 1, 2011 32,624,790 48,937,185.00 Part of dividend paid in shares 29,709 44,563.50 At December 31, 2011 32,654,499 48,981,748.50

MAIN SHAREHOLDERS

Bouygues SA 31,526,344 96.55% Other shareholders 1,128,155 3.45%

CHANGE IN EQUITY

January 1. 2011 Appropriation Capital increase Other changes December 31, by AGM (1) 2011 Share capital 48.9 0.1 49.0 Share premium account 401.7 4.2 405.9 Revaluation reserve 2.7 2.7 Legal reserve 4.8 4.8 Blocked reserve 0.7 0.7 Other reserves 13.5 13.5 Retained earnings 386.3 61.9 448.2 Share premium and reserves 809.7 61.9 4.2 875.8 Net proﬁ t for the year 267.4 (267.4) 324.6 324.6 Tax-driven provisions 10.4 0.9 11.3 Total equity 1,136.4 (205.5) 4.3 325.5 1,260.7

(1) Distribution of a dividend of 6.30 euros per share amounting to a total of 205,536,177 euros.

Note 6 – Provisions for contingencies and losses

January 1. 2011 Increases Provisions used Provisions December 31, cancelled 2011 Litigation and claims 4.8 0.3 (1.3) 3.8 Guarantees provided to customers 0.1 0.1 Tax reassessments 2.7 (0.7) 2.0 Risks related to foreign operations 22.7 1.2 (0.2) 23.7 Other provisions for contingencies 50.1 7.9 (45.4) (3.5) 9.1 Employee beneﬁ ts 0.9 (0.6) 0.3 Provisions for losses 3.4 (1.3) (1.4) 0.7 Provisions for contingencies and losses 84.7 9.4 (47.6) (6.8) 39.7

112 Colas Group Colas ﬁ nancial statements Note 7 – Breakdown of accounts Note 10 – Breakdown of revenue involving related companies France International 2011 2010

Assets Liabilities Income Works (1) 4.6 4.6 22.9 statement Sale of 364.3 187.8 552.1 362.1 Non-current 1,609.8 – – products (2) ﬁ nancial assets Provision of 121.6 79.1 200.7 191.7 Receivables 209.8 – – services (3) Cash and 20.0 Revenue 485.9 271.5 757.4 576.7 cash equivalents (1) Project in Romania. Financial debt – – – (2) Sales of oil products by SRD (Société de la Ra$ nerie de Dunkerque). Non-ﬁ nancial debt – 684.4 – (3) Provisions of services to subsidiaries and a$ liates. Financial income – – 313.8 Financial expense – – (100.6) Total 1,839.6 684.4 213.2 Note 11 – Financial income (expense)

2011 2010 Dividends received from 243.8 262.9 Note 8 – Receivables and payables subsidiaries and a$ liates by maturity at the balance sheet date Net interest income (1.6) (0.5) (expense) Net Less 1 to More amount than 5 years than Other fi nancial provision 8.8 (84.5) 1 year 5 years (charges) reversals Receivables 317.1 99.1 216.4 1.6 Net gain on disposal related to of marketable securities non-current Translation adjustment (1.7) (1.8) assets Losses on advances to (37.9) Receivables 270.6 270.6 subsidiaries and a$ liates related to current assets Net fi nancial income 211.4 176.1 (expense) Cash and cash 31.6 31.6 equivalents Receivables 619.3 401.3 216.4 1.6 Financial debt Note 12 – Exceptional income Non-fi nancial 854.1 854.1 (expense) debt Bank overdrafts 15.0 15.0 2011 2010 and short-term Capital gain (loss) 33.8 6.2 loans on the disposal of fi xed Payables 869.1 869.1 assets (non-recurring disposals: land, buildings, non-current fi nancial assets) Other income (expense) 0.7 Note 9 – Other non-fi nancial debt, on management accruals and deferred income transactions (net) Exceptional provision (0.9) (2.0) 2011 2010 (charges) reversals Tax and social security 47.7 31.3 Exceptional gain (loss) 33.6 4.2 liabilities Liabilities in respect 3.6 3.2 of fi xed assets Other liabilities 17.1 15.8 Deferred income and 10.0 12.6 other regularization accounts Total 78.4 62.9

Colas fi nancial statements Colas Group 113 Note 13 – Income taxes Note 14 – Impact of derogatory tax-driven provisions on profi t BREAKDOWN OF TAX EXPENSE Net profi t for the year 324.6 2011 2010 Amounts charged for the year 2.5 Current tax charge (29.0) (13.1) to tax-driven provisions for the year Reversals for year of tax-driven provisions (1.5) Tax supplements or 1.6 (1.2) reductions for prior years Impact on tax (0.3) Deferred tax 0.7 (0.9) Net profi t excluding the impact 325.3 of tax-driven provisions on profi t Income taxes (26.7) (13.4)

BREAKDOWN OF TAX CHARGE BETWEEN CURRENT PROFIT AND EXCEPTIONAL PROFIT Note 15 – O* -balance sheet commitments Profi t before Tax due Net profi t tax after tax FINANCE LEASE Current profi t 317.7 (19.2) 298.5 (after profi t None. sharing) Exceptional 33.6 (7.5) 26.1 OTHER COMMITMENTS income (expense) Guarantees Letters of Total Total 351.3 (26.7) 324.6 intent Subsidiaries 0.2 0.2 and a$ liates BREAKDOWN OF DEFERRED TAX Other related 0.8 0.8 Temporary companies di* erences Third parties 39.4 0.1 39.5 Non-current assets (8.2) Commitments 39.6 0.9 40.5 Current assets 3.5 given Provisions for contingencies and losses, 24.1 Commitments ––– temporarily not deductible received Debt The Company issued a guarantee for 2011 pursuant Tax losses available for carry forward to article 17 of the Companies (Amendment) Act Total deferred tax bases 19.4 1986 of Ireland in favor of the following companies: Colas Teoranta, Road Maintenance Services Ltd, Colas Tax rate 34.43% Building Products Ltd, Cold Chon (Galway) Ltd, Colfi x Deferred tax at fi scal year end 6.7 (Dublin) Ltd, Colas Construction Ltd, Road Binders Ltd, Deferred tax at the beginning of the year 6.0 Chemoran Ltd and Atlantic Bitumen Company Ltd. Deferred tax (income) expense 0.7 COLLATERAL GRANTED IN RESPECT OF DEBTS Colas is a member of the tax consolidation group of Bouygues. None.

114 Colas Group Colas ﬁ nancial statements Note 16 – Workforce and Note 17 – Fees p aid to the Statutory remuneration of executive bodies Auditors

AVERAGE WORKFORCE Mazars KPMG 2011 2010 2011 2010 2011 2010 Statutory audit and 0.2 0.2 0.2 0.2 Managers and engineers 265 236 certiﬁ cation of annual ﬁ nancial statements Clerical and technical 76 75 Other fees 0.7 Site workers – – Total 0.2 0.2 0.9 0.2 Total 341 311

ADVANCE PAYMENTS AND LOANS GRANTED TO EMPLOYEES None.

COMPENSATION AWARDED TO MEMBERS OF THE EXECUTIVE BODIES Total gross compensation (including beneﬁ ts in kind but excluding variable compensation) paid by the Bouygues Group and re-billed to Colas in respect of his duties as a Group senior executive in 2011 to Mr. Hervé Le Bouc, Chairman and Chief Executive Officer, amounted to 924,100 euros (924,100 euros in 2010). Gross variable compensation for 2011 established in relation to quantitative and qualitative targets to be paid in 2012 will be 1,380,000 euros (650,716 euros paid out in 2011 for 2010). He received an amount of 20,000 euros in Directors’ fees from Colas in 2011. Mr. Hervé Le Bouc beneﬁ ts from a supplementary pension plan as a member of the General Management Committee of Bouygues which represents 0.92% of yearly compensation per year of seniority in the said plan with a ceiling amounting to eight times that of French Social Security. This supplementary pension plan has not been posted as a provision since this plan consists of an insurance contract subscribed with an external organization and is governed by the procedure for regulated agreements. The amount of directors’ fees paid by Colas and its subsidiaries to the Directors of Colas in 2011 amounted to 240,000 euros (including the amount paid to the Chairman and Chief Executive O$ cer).

Colas ﬁ nancial statements Colas Group 115 Note 18 – Subsidiaries and a$ liates

Share Other % held Value of securities Loans and Guarantees Revenue Net Dividends capital equity advances provided 2011 income received Gross Net granted 2011 in 2011 1. Subsidiaries France Colas Centre-Ouest 3.3 17.5 99.9 3.4 3.4 41.0 358.5 (3.0) – Colas Île-de-France 19.7 17.6 99.9 19.7 19.7 589.9 6.1 3.0 – Normandie Colas Nord-Picardie 2.9 15.2 99.9 2.9 2.9 1.0 240.7 3.2 1.5 Colas Est 10.4 17.1 99.9 10.2 10.2 17.0 358.7 4.0 1.0 Colas Rhône-Alpes 12.9 69.3 99.9 36.1 36.1 15.0 440.8 9.9 4.0 - Auvergne Colas 6.9 40.3 99.9 6.1 6.1 400.5 14.1 11.0 Midi-Méditerranée Colas Sud-Ouest 6.9 15.5 99.9 5.8 5.8 20.0 357.7 2.6 2.0 Aximum 49.1 (14.1) 99.9 50.1 50.1 30.0 363.3 (1.8) – Screg Ouest 11.7 2.6 99.9 21.0 21.0 29.0 290.6 (1.5) – Screg Île-de-France 8.8 18.8 99.9 24.7 24.7 321.9 4.0 3.2 – Normandie Screg Nord-Picardie 12.1 17.3 99.9 19.7 19.7 199.9 3.5 2.1 Screg Est 13.4 22.2 99.9 30.8 30.8 26.0 359.4 4.2 2.5 Screg Sud-Est 8.3 20.9 99.9 23.7 23.7 4.0 352.4 5.3 3.4 Screg Sud-Ouest 9.0 19.3 99.9 20.2 20.2 10.0 290.3 4.4 3.0 Sacer Atlantique 4.4 6.6 99.9 4.4 4.4 28.0 260.0 (1.4) – Sacer Paris-Nord-Est 4.8 11.4 99.9 4.9 4.9 1.0 205.9 2.9 2.0 Sacer Sud-Est 5.1 12.2 99.9 5.2 5.2 258.2 3.5 2.5 Spac 5.1 6.2 99.9 14.3 14.3 4.0 237.6 (5.1) 4.0 Smac 4.3 31.1 99.9 9.9 9.9 664.6 8.6 8.0 Colas Rail 90.3 49.2 100.0 316.4 316.4 20.0 595.8 (6.6) – Société de la 40.7 4.7 100.0 21.2 21.2 79.4 0.6 – Ra$ nerie de Dunkerque GTOI 0.8 19.5 100.0 1.4 1.4 157.5 4.2 – Colas Réunion 4.0 16.3 100.0 30.3 30.3 – (0.1) – Industries SBEG 7.5 12.7 100.0 7.6 7.6 23.5 4.8 5.2 Gouyer 2.0 3.9 96.9 48.0 48.0 3.6 (0.4) – Other French 13.0 13.0 115.4 – – 16.5 subsidiaries Total subsidiaries 751.0 751.0 361.4 74.9 France

2. A$ liates – France Coﬁ route 158.3 1 983.3 16.6 10.9 10.9 – – 50.9 Other a$ liates 9.6 9.6 9.9 – – – – France Total a$ liates 20.5 20.5 9.9 50.9 France

3. Foreign subsidiaries and a$ liates Foreign subsidiaries 575.0 468.1 82.6 0.2 – – 118.0 Foreign a$ liates 75.1 55.2 – – – – – Total 1,421.6 1,294.8 453.9 0.2 243.8

116 Colas Group Colas ﬁ nancial statements Note 19 – List of subsidiaries, a$ liates and marketable securities

Name Number of securities Book value in thousands of euros Colas Centre-Ouest 3,299,994 3,354 Colas Île-de-France – Normandie 19,739,194 19,726 Colas Nord-Picardie 2,849,994 2,897 Colas Est 10,393,970 10,193 Colas Rhône-Alpes – Auvergne 12,925,960 36,061 Colas Midi-Méditerranée 6,899,994 6,123 Colas Sud-Ouest 6,938,747 5,848 Société de la Ra$ nerie de Dunkerque 2,670,000 21,188 Aximum 49,071,094 50,129 Screg Ouest 11,674,994 21,007 Screg Île-de-France – Normandie 8,799,994 24,697 Screg Nord-Picardie 12,108,494 19,739 Screg Est 13,439,994 30,795 Screg Sud-Est 8,353,938 23,678 Screg Sud-Ouest 8,999,994 20,227 Sacer Atlantique 4,349,994 4,421 Sacer Paris Nord-Est 4,799,992 4,878 Sacer Sud-Est 5,099,994 5,183 Spac 5,099,994 14,330 Smac 4,299,994 9,930 Sobib 3,924,050 3,907 Adelac 859,050 8,590 Colas Rail 90,312,756 316,385 Grands Travaux de l’Océan Indien (GTOI) 799,964 1,381 Colas Réunion Industries 5,000 30,300 Société des Bitumes et Émulsions Guyanaises 7,500,000 7,644 Colas Martinique 799,999 762 Colas Guadeloupe 759,999 616 Gouyer 124,436 48,033 Cofi route 676,401 10,937 Blanchard 119,999 425 Société Parisienne d’Études d’Informatique et de Gestion 790,345 944 Colasie 624,225 634 Colas Environnement et Recyclage 160,000 312 Mars 340 816 Les Scop 1,000 1,029 43/45, rue R.-Witchiz 500 225 18, rue Nouvelle 500 772 Mouche 1,000 227 Other stakes in French companies – 3,230 Other stakes in foreign companies – 523,196 Total subsidiaries 1,294,769 Other securities held in French companies 26 Other securities held in foreign companies – Total other non-current fi nancial assets 26 Certifi cates of deposit – SICAV mutual funds – Total marketable securities 0 Total subsidiaries, a$ liates and marketable securities 1,294,795

Colas fi nancial statements Colas Group 117 Results of the Company for the last fi ve fi scal years

in thousands of euros 2007 2008 2009 2010 2011 Share capital at the end of the fi scal year Share capital 48,575 48,820 48,903 48,937 48,982 Number of shares issued 32,516,685 32,546,671 32,601,789 32,624,790 32,654,499 Number of bonds convertible into shares None None None None None Operations and results for the fi scal year Revenue excluding tax 447,005 739,587 573,294 576,703 757,399 Profi t before tax, depreciation, amortization 314,692 385,752 405,952 378,508 349,625 and provisions Income taxes 27,417 28,903 30,095 13,385 26,735 Profi t sharing for the fi scal year 1,490 1,766 1,729 1,405 1,668 Profi t after tax, depreciation, amortization 278,477 327,745 329,061 267,456 324,627 and provisions Distributed profi t 276,392 284,783 220,062 205,536 237,072 (1) Earnings per share (in euros) Profi t after tax but before depreciation, 8.83 10.96 11.53 11.19 9.89 amortization and provisions Profi t after tax, depreciation, amortization 8.56 10.07 10.09 8.20 9.94 and provisions Dividend per share (in euros) 8.50 8.75 6.75 6.30 7.26 (1) Workforce Average workforce 295 311 317 311 341 Total payroll 49,104 45,671 45,327 44,352 47,554 Amounts paid in respect of social benefi ts 18,872 15,002 13,524 15,393 13,147 (social security, etc.)

(1) 2011 dividend: subject to the approval of the Shareholders’ Meeting of April 17, 2012.

118 Colas Group Colas ﬁ nancial statements Report of the Statutory Auditors on Colas ﬁ nancial statements

(Fiscal year ended December 31, 2011)

To the Shareholders, As indicated in note 2 of the individual fi nancial statements, the investment securities held by Colas are rec- In accordance with our appointment as Statutory ognized at their acquisition cost less any impairment Auditors by your Shareholders’ Meeting, we hereby deemed necessary determined based on their value in report to you for the year ended December 31, 2011 use. In the course of our work, we obtained assurance on: as to the coherence and consistency of the assump- – the audit of the accompanying fi nancial statements tions used and the calculation methods retained. of Colas; The assessments on these matters were made in the – the justifi cation of our assessments; context of our audit approach to the fi nancial statements taken as a whole and therefore contributed to – the specifi c procedures and disclosures required by the opinion expressed in the fi rst part of this report. law. These financial statements have been approved by 3 – SPECIFIC PROCEDURES AND DISCLOSURES the Board of Directors. Our role is to express an opin- We also performed, in accordance with professional ion on these fi nancial statements, based on our audit. standards applicable in France, specifi c verifi cations 1 – OPINION ON THE INDIVIDUAL FINANCIAL required by law. STATEMENTS We have no matters to report regarding the fair We conducted our audit in accordance with profes- presentation and consistency with the fi nancial state- sional standards applicable in France. Those standards ments of the information given in the management require that we plan and perform the audit to obtain report of the Board of Directors and in the documents reasonable assurance about whether the financial addressed to shareholders with respect to the fi nan- statements are free of material misstatement. An cial position and the individual fi nancial statements. audit includes examining, on a test basis or by other With regard to the information disclosed pursuant sampling methods, evidence supporting the amounts to the provisions of article L. 225-102-1 of the French and disclosures in the fi nancial statements. An audit Code of Commerce on remuneration and benefits also includes assessing the accounting principles used granted to company o$ cers in addition to any com- and signifi cant estimates made by the management, mitments made in their favor, we have verifi ed their as well as evaluating the overall fi nancial statements consistency with the fi nancial statements or with the presentation. We believe that the data we have col- data that was used to prepare the financial state- lected is sufficient and appropriate to be used as a ments, and, if applicable, with the data obtained by basis for our opinion. your Company from the companies that control or In our opinion, the fi nancial statements give a true and are controlled by your Company. On the basis of this fair view of the fi nancial position and the assets and work, in our opinion, this information is true and fairly liabilities of the Company as of December 31, 2011 and presented. of the results of its operations for the year then ended, Paris-La Défense and Courbevoie, February 27, 2012 in accordance with French accounting regulations. The Statutory Auditors 2 – JUSTIFICATION OF OUR ASSESSMENTS KPMG Audit MAZARS In accordance with the requirements of article A division of KPMG SA L. 823-9 of the French Code of Commerce relating to the justifi cation of our assessments, we hereby report Xavier Fournet Gilles Rainaut Gaël Lamant on the following matters. Partner Partner Partner

Report of the Statutory Auditors Colas Group 119 Special report of the Statutory Auditors

on related party agreements and commitments

(Fiscal year ended December 31, 2011)

To the Shareholders, The guarantee is issued in the form of a surety bond, as follows: In our capacity as Statutory Auditors of your Company, we hereby report on related party agree- − the guarantee covers 70% of each unpaid amount ments and commitments. by the A63 consortium, each of these amounts being within the limits of the ceiling of liability as stipulated We are required to inform you, on the basis of the in the design-build contract; information provided to us, of the terms and conditions of those agreements and commitments indi- − Colas’ guarantee is to be applied once the members cated to us, or that we may have discovered. We of the A63 consortium have already been solicited. are not required to comment as to whether they are When Colas Sud-Ouest and Screg Sud-Ouest have benefi cial or appropriate, nor to search for the exist- paid the share that corresponds to their own stake ence of other agreements and commitments. It is your in the A 63 consortium, i.e., 25.5% for each of the said responsibility, in accordance with article R. 225-31 of companies, then the total amount is deducted from the French Code of Commerce, to evaluate the ben- the 70% covered by the Colas guarantee; efits resulting from these agreements and commit- − the said guarantee comes to an end pursuant to the ments prior to their approval. end of the construction completion warranty period Moreover, we are required to provide you with the that follows phase 2 of the works. information as stipulated in article R. 225-31 of the Director concerned: French Code of Commerce regarding the execution of Thierry Genestar. all agreements and commitments already approved by the Annual Shareholders' Meeting. • Modifi cations to the legal structure of Colas Rail in We performed those procedures which we consid- Great Britain ered necessary to comply with professional guid- As part of a program to modify the legal structure of ance issued by the French Institute of Statutory Colas Rail in Great Britain, the Board of Directors at a Auditors (Compagnie nationale des commissaires aux meeting on August 29, 2011 authorized the transfer by comptes) relating to this type of engagement. These Colas to its subsidiary Colas Rail Holding of its share procedures consisted in verifying that the information in the capital of Seco Rail Ltd for an amount of 5,836 provided to us is consistent with the documentation euros. from which it has been extracted. Directors concerned: AGREEMENTS AND COMMITMENTS SUBMITTED Hervé Le Bouc, Thierry Montouché, Christian de Pins. TO THE SHAREHOLDERS’ MEETING FOR APPROVAL • Transfer of shares in Développement Infrastructures to Screg Sud-Est Agreements and commitments authorized during the fi scal year Développement Infrastructures is a company specialized in equity portfolio management for construction Pursuant to article L. 225-40 of the French Code of companies and quarries. Commerce, we were informed of the following agreements and commitments which had received prior To improve synergy in quarry management in the authorization by the Board of Directors. Greater Lyon area, the Board of Directors, at a meeting on August 29, 2011, authorized the transfer by • Guarantee provided by Colas Colas to its subsidiary Screg Sud-Est of all the shares on Highway A63 project it held in the capital of Développement Infrastructures for an amount of 7,930,000 euros. On February 28, 2011, the Board of Directors of Colas authorized the issuance of a Colas guarantee for Directors concerned: the concessionary company Atlandes as part of the Hervé Le Bouc, Thierry Genestar. fi nancing of the Highway A 63 concession project.

120 Colas Group Report of the Statutory Auditors • Modifi cations of the legal structure in Guadeloupe • Shared services agreement As part of a program to modify the legal structures The Board of Directors’ meeting on November 14, 2011 of the Colas companies in Guadeloupe, the Board of authorized the renewal for a period of one year of the Directors, at a meeting on August 29, 2011, authorized shared services agreement signed between Bouygues the transfer by Colas of: and Colas, for which Bouygues provides sub-groups of services to Colas, in particular in the fi eld of man- − 222 shares held by Colas in the share capital of agement, human resources, information technology Tropic Travaux Signalisation to SPRI for 1,776 euros; and fi nance. − 15 shares held by Colas in the share capital of The agreement had no impact on the 2011 financial Grands Travaux de Guadeloupe to Colas Guadeloupe statements. It will a! ect the 2012 fi nancial statements. for 15 euros; Directors concerned: − 77 shares held by Colas in the share capital of François Bertière, Olivier Bouygues, Jean-François Routes Nouvelles to Sogetra for 1,584 euros. Guillemin, Hervé Le Bouc and Bouygues SA, repre- Directors concerned: sented by Philippe Marien. Hervé Le Bouc. • Tax consolidation Cash management • The Board of Directors’ meeting of December 15, 2011 On November 14, 2011, the Board of Directors author- authorized the renewal for a period of fi ve fi scal years, ized a rider to the agreement with Bouygues Relais for from January 1, 2012 to December 31, 2016, renewable an amount of 750 million euros. The agreement takes by tacit agreement, of the tax consolidation agree- e! ect as of March 1, 2011 until March 1, 2012. ment signed with Bouygues SA. In this regard, Colas had an amount outstanding of The agreement had no impact on the 2011 financial 20 million euros from Bouygues Relais. In addition, statements. It will a! ect the 2012 fi nancial statements. transactions carried out in fi scal 2011 generated a net Directors concerned: expense of 4,160,283 euros. François Bertière, Olivier Bouygues, Jean-François Directors concerned: Guillemin, Hervé Le Bouc and Bouygues SA, repre- François Bertière, Olivier Bouygues, Jean-François sented by Philippe Marien. Guillemin, Hervé Le Bouc and Bouygues SA, represented by par Philippe Marien. • Supplemental defi ned benefi t pension scheme The Board of Directors’ meeting of November 14, Use of aircraft • 2011 authorized the renewal, for fiscal year 2012, of The Board of Directors’ meeting of November 14, the agreement relating to the collective supplemen- 2011 authorized the renewal of the agreement with tal defined benefit pension scheme of which Mr. Bouygues SA regarding the use of aircraft, with the Hervé Le Bouc is benefi ciary as Chairman and Chief company SNC Airby, subsidiary of Bouygues SA and Executive O$ cer. SCDM, for a period of one year, as of January 1, 2012. The agreement covers a supplemental defi ned benefi t The agreement stipulates that a Global 5000 jet shall pension scheme for Mr. Hervé Le Bouc that includes be made available to Colas, and if this aircraft is una- the following: vailable, a Challenger 605, or an equivalent aircraft, − the amount of the additional annuity is 0.92% of for an hourly rate of 7,000 euros, excluding VAT. The the reference salary per year of membership of the price includes the provision of the plane, and all other scheme; related services. Invoices shall be sent as the aircraft is used. − contributions by the Company, that are made to the fund constituted by the insurer, vary based on the The agreement had no impact on the 2011 financial rights acquired by the benefi ciary and the expected statements. It will a! ect the 2012 fi nancial statements. returns of the amounts invested. Directors concerned: The agreement had no impact on the 2011 financial François Bertière, Olivier Bouygues, Jean-François statements. It will a! ect the 2012 fi nancial statements. Guillemin, Hervé Le Bouc and Bouygues SA, represented by Philippe Marien. Director concerned: Hervé Le Bouc.

Report of the Statutory Auditors Colas Group 121 Agreements and commitments from prior The amount of the contribution paid by Colas for fi s- years which had not been submitted to the cal year 2011 amounts to 272,014 euros excluding VAT. Shareholders’ Meeting for approval Director concerned: We were informed of the following agreements and Hervé Le Bouc. commitments, authorized during fi scal 2010, that were included in our special report on agreements and AGREEMENTS AND COMMITMENTS WHICH commitments for 2010, and which were not submit- HAD RECEIVED PRIOR APPROVAL BY THE SHAREHOLDERS' MEETING ted for approval to the Annual General Shareholders’ Meeting held on April 15, 2011 that examined the fi nan- Agreements and commitments which had cial statements for fi scal year 2010. received prior approval and which continued to be in e* ect during the fi scal year • Shared services agreement Pursuant to article R. 225-30 of the French Code of The shared services agreement signed between Commerce, we inform you that the following agree- Bouygues and Colas, for which Bouygues provides ments, which had been previously authorized by prior sub-groups with services, in particular in the fi eld of Shareholders’ Meetings, continued to be in e! ect dur- management, human resources information technol- ing the last fi scal year. ogy and fi nance, continued to be applied in 2011. The corresponding expenses recognized by Colas • Cash management during the fiscal year ended December 31, 2011 The Board of Directors, at a meeting on August 30, amounted to 16,081,009 euros excluding VAT. 2010, authorized a rider to the agreement signed with Directors concerned: Bouygues Relais for a maximum amount of 750 mil- François Bertière, Olivier Bouygues, Jean-François lion euros. The rider took e! ect on September 1, 2010 Guillemin, Hervé Le Bouc and Bouygues SA, repre- and remained in e! ect up to March 1, 2011. sented by Philippe Marien. Directors concerned: François Bertière, Olivier Bouygues, Jean-François Service agreement: use of aircraft • Guillemin, Hervé Le Bouc and Bouygues SA, repre- The Board of Directors’ meeting of November 26, sented by Philippe Marien. 2010 authorized the renewal for a period of one year of the agreement between Colas and Bouygues SA • Tax consolidation regarding the use of aircraft as of January 1, 2011. The tax consolidation agreement signed on The amount of the expense recognized in the fi nan- December 19, 2000 between Colas and Bouygues SA cial statements for the year ended December 31, 2011 continued to apply in 2011. The Board of Directors’ by Colas in respect of this agreement amounted to meeting of September 1, 2006 authorized the renewal 417,375 euros excluding VAT. of this agreement until the end of fi scal year 2011. Directors concerned: This agreement governs the apportionment of tax François Bertière, Olivier Bouygues, Jean-François expenses within the consolidated group constituted Guillemin, Hervé Le Bouc and Bouygues SA, repre- by the parent company Bouygues SA, pursuant to sented by Philippe Marien. article 223-A of the French General Tax Code, attrib- uting to Colas tax expenses that it is jointly liable • Supplemental defi ned benefi t pension scheme to pay. As part of the agreement, Colas authorized Bouygues SA to become solely liable to pay the cor- The Board of Directors’ meeting of November 26, porate income tax of Colas, with regard to determin- 2010 authorized the renewal, for fiscal year 2011, of ing the net profi t of the Group as a whole. the agreement relating to the collective supplemental defi ned benefi t pension scheme of which Mr. Hervé Directors concerned: Le Bouc is beneficiary as Chairman and Chief François Bertière, Olivier Bouygues, Jean-François Executive O$ cer: Guillemin, Hervé Le Bouc and Bouygues SA, represented by Philippe Marien. − the amount of the additional annuity is 0.92% of the reference salary per year of membership of the scheme; − contributions by the Company, that are made to the fund constituted by the insurer, vary based on the rights acquired by the benefi ciary and the expected returns of the amounts invested.

122 Colas Group Report of the Statutory Auditors • Supplemental deﬁ ned contribution pension scheme On February 21, 2007, the Board of Directors authorized the application of an agreement relating to a defined contribution pension scheme, of which two Directors having the status of employees are beneﬁ ciaries. The employer’s contribution to this scheme amounted to 4% of the total remuneration of the respective employees (fixed and variable remuneration). The corresponding amount of the expense for 2011 recognized in the accounts of Colas was 40,444 euros excluding VAT. Directors concerned: Thierry Genestar and Thierry Montouché.

Paris-La Défense and Courbevoie, February 27, 2012 The Statutory Auditors KPMG Audit MAZARS A division of KPMG SA Xavier Fournet Gilles Rainaut Gaël Lamant Partner Partner Partner

Report of the Statutory Auditors Colas Group 123 Report of the Statutory Auditors

on the transactions in share capital relating to the 11 th and 12 th resolutions of the Extraordinary Shareholders’ Meeting of April 17, 2012

(Extraordinary Shareholders’ Meeting of April 17, 2012)

To the Shareholders, The maximum nominal amount of issues of these securities conferring entitlement to a claim on the In our capacity as Statutory Auditors of your Company carried out under this delegation may not Company and pursuant to the terms of the French exceed a ceiling of seven hundred fi fty million euros Code of Commerce, we hereby present our report on (750,000,000) euros or in foreign currencies, or in any the operations submitted for your approval. other monetary unit based on a basket of currencies at the date of issuance, which will be subject to your 1 – STATUTORY AUDITORS’ REPORT ON THE REDUCTION OF SHARE CAPITAL BY RETIRING approval. TREASURY SHARES OWNED BY THE COMPANY TH Your Board of Directors proposes, on the basis of its (11 RESOLUTION) report, that you grant it, for a period of twenty-six Pursuant to article L. 225-209 of the French Code of months, the authority to enter into the transactions Commerce on the decrease in share capital by the described above and to set the fi nal terms thereof. cancellation of a company’s own shares, we as the Your Board of Directors must prepare a report in com- Statutory Auditors of your Company hereby report on pliance with articles R. 225-113, R. 225-114 and R. 225- our assessment of the reasons for and conditions of 117 of the French Code of Commerce. It is our role to the proposed decrease in share capital. give our opinion on the fair presentation of account- Your Board of Directors requests the delegation of all ing figures taken from financial statements, and on powers, for a period of eighteen months, to cancel the various information concerning these transactions shares, purchased following the granting of author- provided in this report. ity by your Company to purchase its own shares, For this purpose, we have performed the work that up to a maximum of 0.96% of its share capital and we deemed was necessary in accordance with the by a 24-month period starting from the date of this relevant rules and recommendations of the French Shareholders’ Meeting. Statutory Auditors’ board (Compagnie nationale des We performed the procedures that we deemed neces- commissaires aux comptes) . This work consisted in sary in accordance with the professional guidelines of verifying the content of the Board of Directors’ report the French Institute of Statutory Auditors (Compagnie relating to these transactions. nationale des commissaires aux comptes) relating to Since the modalities of the transactions have not yet this type of engagement. These procedures consisted been determined, we cannot give our opinion on the in reviewing the fairness of the reasons for and condi- terms under which the transactions will take place. tions of the proposed decrease in share capital. Pursuant to article R. 225-116 of the French Code of We have no comments on the reasons for and condi- Commerce, we will provide a supplementary report in tions of the proposed decrease in share capital. the event your Board of Directors decides to exercise this authorization. 2 – STATUTORY AUDITORS’ REPORT ON THE CREATION AND ISSUE OF SECURITIES OTHER THAN THE BONDS PROVIDED FOR Paris-La Défense and Courbevoie, February 27, 2012 IN ARTICLE L. 228-40 OF THE FRENCH CODE The Statutory Auditors OF COMMERCE (12 TH RESOLUTION) KPMG Audit MAZARS Pursuant to article L. 228-92 of the French Code A division of KPMG SA of Commerce, as the Statutory Auditors of your Company, we hereby report on the proposed delega- Xavier Fournet Gilles Rainaut Gaël Lamant tion of authority to the Board of Directors to decide Partner Partner Partner upon the creation and issue of securities (other than the bonds provided for in article L. 228-40 of the French Code of Commerce) confering entitlement to fi xed-term or perpetual debt instruments, or any other instruments conferring, in a single issue, a similar claim on the Company.

124 Colas Group Report of the Statutory Auditors 126 ORDINARY MEETING RESOLUTIONS 128 EXTRAORDINARY MEETING RESOLUTIONS

Resolutions

Colas Group 125 The dividend of 7.26 euros per share shall be paid by Ordinary Meeting Colas, the issuing company, as of May 2, 2012. For shareholders who pay income tax in France, this divi- resolutions dend per share is eligible for a 40% tax rebate pursuant to article 243 bis of the General Tax Code. The Shareholders’ Meeting decides that this dividend is to be paid in cash. First resolution As required by law, we remind you that the following dividends were paid during the past three fi scal years APPROVAL OF THE INDIVIDUAL COMPANY on shares with a par value of 1.50 euros: FINANCIAL STATEMENTS Year Dividend The Shareholders’ Meeting, after the reading of the Board’s management report and the Statutory 2008 €8.75 Auditors’ general report, approves the Company’s 2009 €6.75 financial statements for fiscal year 2011 – which 2010 €6.30 include the balance sheet, the income statement and the notes, and which show a profi t of 324,626,714.03 euros – and the transactions refl ected in these statements and which are summarized in these reports Fourth resolution The Shareholders’ Meeting grants full discharge to the Directors for their management. APPROVAL OF THE AGREEMENTS AND TRANSACTIONS SPECIFIED IN ARTICLES The Shareholders’ Meeting recognizes that the L. 225-38 ET SEQ. OF THE FRENCH CODE expenses specified in articles 39-4 and 223 quater OF COMMERCE of the General Tax Code, and which are subject to The Shareholders’ Meeting, on the basis of the corporate income tax, totaled 6,293 euros for fi scal Statutory Auditors’ special report concerning the year 2011. agreements and transactions specifi ed in articles L. 225-38 et seq. of the French Code of Commerce, approves all such agreements and transactions men- Second resolution tioned in this report.

APPROVAL OF THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Fifth resolution The Shareholders’ Meeting, after the reading of the Board’s management report and the Statutory REAPPOINTMENT OF A DIRECTOR Auditors’ general report, approves the annual consolidated fi nancial statements for fi scal year 2011 – which The Shareholders’ Meeting renews Mr. Louis Gabanna’s include the balance sheet, the income statement and appointment to the Board for a term of two years that the notes, and which show a net profi t attributable to shall expire upon the Annual Shareholders’ Meeting to the Group of 335,789,000 euros – and the transac- be called to approve the fi nancial statements for fi scal tions refl ected in these fi nancial statements and which year 2013. are summarized in these reports.

Sixth resolution Third resolution REAPPOINTMENT OF A DIRECTOR EARNINGS AND EARNINGS APPROPRIATION The Shareholders’ Meeting renews Mr. Jean-François The Shareholders’ Meeting approves the Board of Guillemin’s appointment to the Board for a term Director’s proposal to appropriate earnings as follows: of two years that shall expire upon the Annual Shareholders’ Meeting to be called to approve the Earnings for the year: €324,626,714.03 ﬁ nancial statements for ﬁ scal year 2013. Plus prior unappropriated earnings: €448,155,669.36 Total unappropriated earnings: €772,782,383.39 −to the legal reserve: €4,456.35 −dividend payout: €237,071,662.74 −balance of unappropriated €535,706,264.30 earnings:

126 Colas Group Resolutions Seventh resolution actions. The portion of the program that may be carried out through block trades is not limited and may REAPPOINTMENT OF A DIRECTOR correspond to the entire program; • decides that the Board of Directors may retire all or The Shareholders’ Meeting renews Mr. Jean-Claude a portion of the shares bought back under terms and Tostivin’s appointment to the Board for a term of two conditions and to the extent permitted by law and the years that shall expire upon the Annual Shareholders’ Shareholders’ Meeting; Meeting to be called to approve the fi nancial state- • decides that, given the current breakdown of share ments for fi scal year 2013. capital, the Board of Directors may acquire shares at a maximum price per share of 200 euros, excluding acquisition costs. For information and pursuant to Eighth resolution the provisions of article R. 225-151 of the French Code of Commerce, the maximum cumulative amount of funds dedicated to this share buyback program, REAPPOINTMENT OF A DIRECTOR assuming a maximum purchase price of 200 euros The Shareholders’ Meeting renews Mr. Gilles per share, would be 61,521,600 euros (on the basis Zancanaro’s appointment to the Board for a term of 307,608 shares, i.e., 0.94% of the total number of of two years that shall expire upon the Annual shares); Shareholders’ Meeting to be called to approve the • decides that, in the event of transactions in the fi nancial statements for fi scal year 2013. Company’s shares during the validity period of this authorization, the maximum price per share indicated shall be adjusted by a multiplying coefficient equal to the ratio between the number of shares making Ninth resolution up the Company’s share capital before and after the transaction; AUTHORIZATION TO BE GRANTED • grants this authorization for a period of eighteen TO THE BOARD OF DIRECTORS TO ALLOW months as of the date of this Meeting; THE COMPANY TO CARRY OUT takes due note that this power of attorney super- TRANSACTIONS IN ITS OWN SHARES • sedes any earlier corresponding delegation; Pursuant to articles L. 255-209 et seq. of the French • the Board of Directors shall be granted full pow- Code of Commerce, the Shareholders’ Meeting, which ers to carry out this authorization and in particular meets the quorum and majority requirements for to evaluate the appropriateness of initiating a share Annual Shareholders’ Meetings and pursuant to the buyback program and to determine the terms thereof, provisions of the European regulation of December in accordance with applicable legal and regulatory 22, 2003 no. 2273/2003 and title IV of book II of the provisions. To this end, the Board of Directors may general regulations of the AMF (Autorité des Marchés carry out any transactions, place any and all buy and Financiers) : sell orders, enter into any and all agreements, fulfill • authorizes the Board of Directors to purchase all formalities and agreements, notably with respect shares subject to a maximum of 307,608 shares. The to maintaining registers of purchases and sales of Board shall at all times comply with the maximum shares, carry out all formalities and declarations with ownership threshold defi ned in article L. 225-210 of respect to the AMF and any other organization, and the French Code of Commerce; generally take any and all other actions required in • decides that the main objectives of this program the implementation of this authorization. The Board shall be (i) the eventual retirement of the shares of Directors may delegate said powers in accordance bought back, provided this has been authorized by with applicable legal and regulatory provisions. an Extraordinary Shareholders’ Meeting, and (ii) to ensure, where necessary, the liquidity needs of mutual funds whose units are held by Group employees under a Company Savings Plan, with the understand- Tenth resolution ing that the achievement of these objectives shall need to comply with applicable laws and regulations; POWERS TO CARRY OUT LEGAL • decides that the acquisition, sale or transfer by the REQUIREMENTS Company of its own shares may be carried out by any The Shareholders’ Meeting shall grant the bearer of means and that the Board of Directors may buy back a copy or extract of the minutes of this Meeting full shares, on one or more occasions, through market or powers to file any documents or comply with any o! -market transactions, over-the-counter trades or legal requirements that may be necessary. otherwise, notably by way of block purchases, including the use of derivatives, and at any time, in particular during a public o! ering period, within the limits pre- scribed by applicable regulations. However, the Board of Directors shall need to ensure that the volatility of the Company’s share is not enhanced through its

Resolutions Colas Group 127 or abroad, by way of a public offering or through Extraordinary Meeting private investment, at such dates and under such conditions as it shall deem appropriate, of securities resolutions other than the bonds provided for in article L. 228-40 of the French Code of Commerce, conferring entitlement, either immediately or over time, to fi xed-term or perpetual debt instruments, or any other instruments conferring, in a single issue, a similar claim on Eleventh resolution the Company. These securities conferring entitlement to debt instruments may be denominated in euros or AUTHORIZATION GRANTED TO THE BOARD in foreign currencies, or in any other monetary unit OF DIRECTORS TO REDUCE SHARE CAPITAL based on a basket of currencies; BY RETIRING COMPANY SHARES THAT • decides that the maximum nominal amount of THE COMPANY OWNS issues of these securities conferring entitlement to After the reading of the Board of Directors’ report a claim on the Company and the debt instruments and the Statutory Auditors’ special report, the to which these securities give access, carried out Shareholders’ Meeting, which meets the quorum and under this delegation, may not exceed a ceiling of majority requirements for Extraordinary Shareholders’ seven hundred fi fty million euros (750,000,000) or its Meetings: equivalent in currencies other than the euro or in any • authorizes the Board of Directors, pursuant to other monetary unit based on a basket of currencies, article L. 225-209 of the French Code of Commerce, with the understanding that this maximum nominal to retire, at its sole discretion and in one or more amount does not include redemption premiums, if transactions, all or a portion of the Company’s shares provided for; the Company holds as the result of the share-buyback • decides that the Board of Directors shall have all authorizations granted by the Shareholders’ Meeting powers necessary to implement this delegation, with to the Board of Directors, subject to a maximum the option to sub-delegate its authority in accordance of 0.96% of the number of shares constituting the with applicable laws and in particular to: Company’s share capital, an amount lower than 10% −proceed with said issues within the abovementioned of shares constituting the Company’s share capital per limits, setting the date, type, amounts and currency of twenty-four month period; the issues, • grants this authorization for a period of eighteen −determine the type and characteristics of the months as of this Shareholders’ Meeting; securities to be issued as well as those of the debt • grants full powers to the Board of Directors, includ- instruments to which these securities may confer ing the option to delegate such powers, to carry out entitlement and in particular their nominal value and any share capital decrease(s) resulting from the retire- the date from which these securities shall carry divi- ment of shares pursuant to this authorization and to dend or interest rights, their issue price, including an amend the by-laws accordingly; issue premium where applicable, their interest rates, • takes due note that this delegation of authority whether fi xed, fl oating or zero coupon and the pay- supersedes any corresponding earlier delegation. ment date, or in the event of fl oating rate securities, the procedures used to determine their interest rates, or the conditions under which interest is capitalized, −set forth the method of amortization and/or early Twelfth resolution redemption of the securities to be issued as well as those for the debt instruments to which these securi- AUTHORIZATION GRANTED TO THE BOARD ties may confer entitlement, in accordance with mar- OF DIRECTORS IN ORDER TO ISSUE ket conditions, where applicable including a fi xed or SECURITIES CONFERRING ENTITLEMENT variable premium, or even a redemption premium to TO DEBT INSTRUMENTS (OTHER THAN THE be paid by the Company, BONDS PROVIDED FOR IN ARTICLE L. 228-40 −decide, if appropriate, to attach a guarantee or OF THE FRENCH CODE OF COMMERCE) surety to the securities to be issued and to the debt The Shareholders’ Meeting, which meets the quo- instruments to which these securities may confer enti- rum and majority requirements for Extraordinary tlement and to determine its type and characteristics, Shareholders’ Meetings, having examined the report −make provision, if applicable, for the redemption prepared by the Board of Directors and the spe- of securities to be issued, as well as that of the debt cial report submitted by the Statutory Auditors instruments to which these securities may confer enti- and pursuant to the provisions of the French Code tlement, to be paid out of Company assets, of Commerce, in particular articles L. 225-129-2 to −and, from an overall perspective, to determine all L. 225-129-6 and L. 228-92 et seq. of the French Code methods and procedures for each issue, enter into any of Commerce: and all agreements with banks and other organiza- • delegates the authority to the Board of Directors tions, take any measures necessary and complete any to decide upon the creation and issue, at its sole dis- formalities required and more generally do anything cretion, in one or several operations, either in France that may be required in this regard;

128 Colas Group Resolutions • grants this delegation of authority for a period of twenty-six months as of the date of this Meeting; • takes due note that this power granted supersedes any earlier corresponding delegation.

Thirteenth resolution

POWERS TO CARRY OUT ALL NECESSARY FORMALITIES The Shareholders’ Meeting grants full powers to the bearer of an original, copy or extract of the minutes of this Meeting to carry out all legal or administrative formalities and to make all things and publish all notices required by applicable laws.

Resolutions Colas Group 129 Certiﬁ cation of annual ﬁ nancial report

I hereby declare that to the best of my knowledge the accounts and statements presented herewith have been drawn up in full compliance with all applicable accounting standards and provide an accurate view of the assets, fi nancial situation and profi ts of the Company and the consolidated companies, and that the business report included in pages 1 to 45 and 55 to 62 of this document provides an accurate image of business trends, profits and the fi nancial situation of the Company and all consolidated companies as well as a description of the main risks and uncertainties to which the latter are exposed.

Boulogne-Billancourt, March 8, 2012 Hervé Le Bouc Chairman and Chief Executive O$ cer

130 Groupe Colas Attestation DESIGN AND PRODUCTION

COPYRIGHT Cover photo: Baloon Photo 7, place René-Clair 92653 Boulogne-Billancourt Cedex – France Tel.: +33 1 47 61 75 00 Fax: +33 1 47 61 76 00 www.colas.com

Colas, a French Société Anonyme with share capital of €48,981,748.50 RCS Nanterre 552 025 314 02325